US lawmaker targets crypto investors using Puerto Rico as a tax haven

A subordinate of the House of Representatives has projected authorities aimed astatine stopping investors from utilizing the US territory of Puerto Rico arsenic a crypto taxation haven.

According to an April 21 Bloomberg report, New York Representative Nydia Velázquez introduced the Fair Taxation of Digital Assets successful Puerto Rico Act, a measure that could alteration existing laws successful the territory to necessitate definite investors to wage section and national taxes connected superior gains, including from integer assets. The authorities would reportedly adhd substance to Puerto Rico’s Internal Revenue Code, making income from cryptocurrencies taxable to national taxation laws.

“This question of crypto investors hasn’t helped Puerto Rico’s betterment oregon strengthened the section economy,” said Rep. Velázquez, according to Bloomberg. “Instead, it’s driven up lodging costs, pushed retired section residents, and added unit to an land wherever astir 40% of radical unrecorded successful poorness — each portion costing the national authorities billions successful mislaid taxation revenue.”

Puerto Rico is well known arsenic a taxation haven for galore radical successful the crypto manufacture since the territory began allowing exemptions successful 2012 nether Act 20 and Act 22 of the Tax Incentives Code — aboriginal consolidated arsenic Act 60. The land has attracted investors, including Pantera Capital laminitis Dan Morehead, task capitalist Brock Pierce, and online influencer Logan Paul.

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Missing retired connected crypto taxation revenue

Rep. Velazquez’s bureau reportedly said Puerto Rico could suffer astir $4.5 cardinal successful gross from 2020 to 2026 owed to the taxation incentives successful place. In contrast, Puerto Rico Governor Jenniffer González-Colón projected extending Act 60, acceptable to expire successful 2035, to the extremity of 2055, but requiring applicants to beryllium taxable to a 4% superior gains taxation rate, smaller than the emblematic scope up to 37% successful the US.

It’s unclear whether the authorities projected by Rep. Velazquez, a Democrat, would person capable governmental enactment to walk successful the Republican-controlled House oregon Senate. Both chambers volition apt consider level votes for stablecoin legislation and a crypto regulatory model successful the coming months.

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