PANews reported on April 22 that according to Bloomberg, U.S. Representative Nydia Velázquez recently proposed the "Puerto Rico Digital Asset Fair Tax Act" aimed at preventing investors from using Puerto Rico as a cryptocurrency tax haven. The bill seeks to modify local tax laws, requiring specific investors to pay local and federal taxes on capital gains, including digital assets. Velázquez pointed out that crypto investors have driven up local housing costs, forcing residents to relocate, without promoting economic recovery and instead causing the federal government to lose billions of dollars in tax revenue.
Since Puerto Rico passed Sections 20 and 22 of the Tax Incentive Law (later merged into Section 60) in 2012, it has become a tax haven for the crypto industry, attracting investors such as Pantera Capital founder Dan Morehead and venture capitalist Brock Pierce. Data shows that the region may lose approximately $4.5 billion in taxes between 2020 and 2026. Although the Puerto Rican governor proposed extending the tax incentives expiring in 2035 to 2055, requiring applicants to pay a 4% capital gains tax, this is still far lower than the highest U.S. tax rate of 37%. It remains unclear whether this bill proposed by a Democratic representative will receive sufficient support in the Republican-controlled House and Senate. In the coming months, both chambers will also vote on stablecoin legislation and crypto regulatory frameworks.
