Puerto Rico Crypto Tax Guide 2025
Many US crypto investors are aware of the tax haven that is Puerto Rico. But what are the rules on crypto tax and how do you qualify to become a resident?
Why is Puerto Rico a crypto tax haven?
Puerto Rico has very favorable tax policies for crypto investors, particularly for US citizens looking to minimize their crypto taxes.
This is because the US taxes its citizens globally, and is one of only two countries in the world to do so. Unless you renounce your American citizenship to get around this, Puerto Rico is a viable alternative for reducing your tax bill.
Read next: US Crypto Tax Guide
How is crypto taxed in Puerto Rico?
For bona fide residents, crypto is not subject to tax, and Puerto Rico corporations are subject to just a 4% federal income tax. This favorable treatment makes Puerto Rico a strategic location for those looking to reduce their tax liability.
An important note though - crypto assets must be earned and disposed of in Puerto Rico to avoid capital gains. If you acquired your crypto while residing in the continental United States, then moved to Puerto Rico and sold it, you must pay US capital gains tax.
How are short and long-term gains taxed in Puerto Rico?
Unlike in the mainland US, there is no difference in tax treatment between short and long-term gains. Once relocated, bona fide residents benefit from a 0% tax rate on capital gains. However, existing holdings before the move are subject to usual US tax implications.
What about losses from crypto?
As gains are not taxable in Puerto Rico, losses from crypto are similarly not deductible. Investors looking to harvest losses should do so from existing holdings in the mainland US before considering relocation.Â
How are mining and staking rewards taxed?
Puerto Rico extends the 4% tax incentive to blockchain activities, including staking and mining. Bona fide residents can anticipate a 0% tax rate on these activities, while corporations involved in these activities will qualify for the 4% corporate tax rate
It’s important to note depending on the scale of your investments, you may be considered to be conducting business activities. You should speak to an experienced accountant for advice on your specific circumstances.
How to calculate crypto gains
To calculate your gain or loss, you simply subtract your cost basis (the price you acquired your crypto for plus any allowable fees) from your sale price. If you otherwise acquired or disposed of your crypto, use the fair market value in USD on the day you acquired or disposed of your crypto instead.
For multiple assets of the same kind, Puerto Rico allows methods that follow the Generally Accepted Accounting Principles (GAAP). Commonly used methods include:
First In, First Out (FIFO): Assets acquired first are sold first
Last In, First Out (LIFO): Assets acquired last are sold first
Highest In, First Out (HIFO): Highest price assets are sold first
What’s the Income Tax rate in Puerto Rico?
You’ll pay between 0% to 33% tax in Puerto Rico on Income, depending on how much you earn:
| Income | Tax Rate |
|---|---|
| Not over $9,000 | 0% |
| $9,000 - $25,000 | 7% of the excess over $9,000 |
| $25,000 - $41,500 | $1,120 plus 14% of the excess over $25,000 |
| $41,500 - $61,500 | $3,430 plus 25% of the excess over $41,500 |
| Over $61,500 | $8,430 plus 33% of the excess over $61,500 |
How do you avoid crypto taxes in Puerto Rico?
You can avoid paying cryptocurrency taxes in Puerto Rico if you qualify as a bona fide resident. Act 60, previously known as Act 22, provides individual resident crypto investors with a tax exemption if they meet specific criteria. As a bona fide resident, you can enjoy a 0% tax rate on capital gains from crypto, interest, or dividends.
How to qualify as a bona fide resident
There are three tests to qualify as a bone fide resident of Puerto Rico:
1. Presence test:
Spend at least 183 days a year in Puerto Rico
Spend fewer than 90 days in the US
Earn less than $3,000 taxable income in the United States
2. Tax home test:
Your primary workplace or residential address must be in Puerto Rico
3. Closer connection test:
Prove long-term intent to stay in Puerto Rico
Purchase property in Puerto Rico within two years of acquiring your Act 60 decree, maintaining it as your primary residence
Make annual donations of $10,000 to local nonprofits, with at least 50% going to organizations combating child poverty
How do you report taxes in Puerto Rico?
US citizens and resident aliens who are not bona fide residents must report income worldwide on their US tax returns. Bona fide residents for the entire tax year must file:
Puerto Rico Tax Return (Form 482): Report worldwide income
US Return (Form 1040): Report worldwide income excluding Puerto Rico income
FAQs
Why are crypto investors moving to Puerto Rico?
Puerto Rico offers extremely favorable tax regulations for crypto, both for individuals and corporations, making it attractive for American taxpayers.
Can you avoid crypto tax in Puerto Rico?
Yes, by becoming a bona fide resident, you can avoid crypto taxes, though it involves specific steps, including annual donations to nonprofits.
Does Puerto Rico have a Capital Gains Tax?
Yes, for bona fide residents, Puerto Rico offers a 0% tax on capital gains.
How do I qualify for Act 60?
Physical Presence: At least 183 days in Puerto Rico annually
Property Purchase: Buy property in Puerto Rico within two years
Annual Donations: $10,000 to local nonprofits, 50% to child poverty organizations
Can I use Coinbase in Puerto Rico?
Yes, you can use Coinbase in Puerto Rico.
