US lawmaker aims to end Puerto Rico’s crypto tax haven status
A new US bill proposes making crypto investments in Puerto Rico subject to federal tax laws, aiming to curb financial losses.
New York MP Nydia Velázquez introduced the Fair Taxation of Digital Assets in Puerto Rico Act. The bill aims to require crypto investors in Puerto Rico to pay both local and federal taxes on capital gains.
Bill seeks to amend Puerto Rico’s tax laws, making income from digital assets subject to federal taxation.
Velázquez criticised the tax incentives for crypto investors. She claimed they have driven up housing costs, displaced residents, and strained the island’s economy, which has a poverty rate of nearly 40%.
Puerto Rico has been a tax haven since 2012, attracting investors, but this has cost the US government billions in lost tax revenue.
Puerto Rico’s Governor Jenniffer González-Colón proposed extending Act 60 until 2055, but with a 4% capital gains tax, far lower than the typical US rate.
It’s unclear if Velázquez’s bill will gain enough support, as both the House and Senate are expected to review crypto-related proposals soon.
Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!
