Puerto Rico’s Governor, Ricardo Rossello in a move to attract crypto investors and holders to live in its land made an open call to everybody to come and take advantage of the tax haven. Puerto Rico recently got devastated by hurricanes Maria and Irma and is trying to recover slowly and an influx of money will definitely help the progress.
All of its power grid was destroyed by the hurricane and 20% of its population still does not have electricity. The governor sees cryptocurrency as a means to bring Puerto Rico out its situation. The country best known for its tax exemptions is currently suffering from a financial crisis.
So why crypto investors?
Cryptocurrency traders are well known to evade tax on their cryptocurrencies so to cash in on this situation, the governor is making attempts to attract them. The “Tax Haven” attraction did not fade away despite the hurricane destruction and to promote this they arranged a conference by the name “Puerto Crypto” from March 11th to 16th of this year.
IRS considers cryptocurrency as property and investors are forced to pay “Capital Gains” tax it. Puerto Rico is an attractive place for crypto investors as it has an exemption in its Internal Revenue Code, called Act 22, which allows non-residents of Puerto Rico to pay no taxes on their long-term capital gains.
IRS is going hard on those evading tax on cryptocurrencies. In an investigation into the users of Coinbase, it found that out of the total 6 million users only 600 to 800 users reported their cryptocurrency tax gains. There was recent research done by Credit Karma which stated that fewer Americans trading in cryptocurrencies were paying taxes.
Mr. Ricardo was positive about cryptocurrencies and says,
“Whoever wants to come to Puerto Rico and enjoy the benefits of Puerto Rico, come to Puerto Rico”
He was also unsure about the dangers of illicit activities using cryptocurrencies, he continues,
“Blockchain is a phenomenal technology; a game changer. Cryptocurrency is sort of an application of that. I am concerned with some of the reports on how it is being used.”
Carlos Martínez, cryptocurrency investor from Santurce spoke to AMBCrypto and says,
“We are open to development and to trade, if the crypto community can help our community to improve then we accept it. We have suffered enough now it’s time for some change. There is skepticism around this [cryptocurrencies] but if it helps make your home better everyone accepts it”
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