Puerto Rico Extends 4% Tax Incentive to Crypto and Blockchain Activities

Puerto Rico has extended its 4% tax incentive to include crypto assets and blockchain activities, such as staking and blockchain validation. The incentive code now covers blockchain technology, digital assets based on blockchain technology, and blockchain validation. Certain providers of digital assets and blockchain activities qualify for the "export service incentive," which allows businesses that export a service from the islands to benefit from a 4% corporate tax rate. This move was not unexpected, as Puerto Rico is already a tax haven for crypto businesses. The Puerto Rico Blockchain Trade Association believes that "a 4% tax on the income generated from staked assets is a win for Puerto Rico." Additionally, the country is considering taxing non-fungible tokens (NFT's) to generate more revenue.