An Act 60-2019 decree is an incentives agreement with the Government of Puerto Rico that demands verifiable compliance for years. The holder must show where services are performed, who is billed and how much employment is maintained. Software grants no benefit and verifies no compliance; it keeps the evidence organized.
The Puerto Rico Incentives Code, known as Act 60-2019, gathers tax benefits previously scattered across several laws. Some benefits arise by operation of law, but others, including those for export services or manufacturing, are granted through a decree: an individual agreement requested from the Incentives Office of the Department of Economic Development and Commerce that sets specific duties for the holder.
For export services, the best-known benefit is a reduced fixed income tax rate on eligible income. But “eligible” has a precise meaning: services rendered from Puerto Rico to customers outside the Island, within the activities the law and the decree describe. Income from a local client, even if the same company bills it, falls outside that rate.
A decree is therefore not a label stuck on the business but a promise to be sustained with documents every year. The original application, the decree’s terms and the later reports must be read together.
Each decree lists its conditions. The most common concern the level of employment maintained on the Island, the nature of the services, the location of clients and the local investments or spending promised. Some also require contributions to specific purposes or audited financial statements with the compliance report.
An example shows the burden of proof. A software consultancy with an export-services decree bills twenty clients, two of which are companies located in Puerto Rico. To separate eligible from non-eligible income it needs, for each client, the country of domicile, the contract describing the service and the year’s invoices. If that information was not captured when the invoice was issued, rebuilding it later is slow and open to dispute.
Read your decree with your advisor and turn every condition into a quarterly question: how many employees do I have today, what share of my income is eligible, what local expenses did I make. A decree is complied with during the year, not the day before the report is due.
The easiest evidence to obtain is what you saved at the time. An invoice that already shows the client’s country and state, a signed contract filed under the client’s name and an employee file with a start date are pieces that need no reconstruction. When the report arrives, the advisor only selects.
With 4invoices you keep each invoice PDF in an archive per client; with 4mycontracts, signed agreements with their version history; with 4softhr, employee records with their dates. In 4softcrm you can note each client’s domicile on its record. These are supporting records: the system does not label income as eligible or compute compliance percentages.
Set a folder or a naming convention in the first month and stick to it. A scheme such as client–year–document type looks trivial, but it is the difference between handing over a file in an afternoon and in two weeks.
A decree holder periodically submits a compliance report to the office that granted it, with the documents and fees the decree and the regulations set. Failing to report, or reporting data that cannot be supported, is a direct route to losing the benefit or facing adjustments with interest.
The report is prepared by the advisor or CPA from the information the business supplies. The more complete and better organized it arrives, the fewer billed hours and unanswered questions. Set an internal date, a month before the deadline, to deliver the complete package.
Requirements change through regulations and amendments. Always consult the current text of your decree and the Incentives Office guidance; what held for an acquaintance’s decree signed years ago may not hold for yours.
No product in the ecosystem applies for decrees, files reports or confirms that you comply. None connects to the Department of Economic Development and Commerce or to Hacienda. Their contribution is practical and limited: keeping invoices, contracts and staff records available, complete and dated for whoever must demonstrate compliance.
Before adopting any tool, ask your advisor which data points are needed each year. With that list in hand, decide which fields to add to your invoices and client records starting next month. A useful companion is a quarterly tracking sheet with four columns: decree condition, current figure, supporting document and owner. If a row is empty, you know where evidence is missing while there is still time to fix it.
If the business changes activity, opens a new service line or moves staff, tell your advisor before making the change. A decree is granted on specific facts, and altering those facts without checking the decree can create a breach nobody planned.
Suppose a design studio holds an export-services decree and committed to maintain six jobs. At the end of the quarter the owner opens a one-page sheet. Row one: employment, seven people on payroll according to the staff records, supported by the payroll summary. Row two: eligible income, with $94,000 billed to clients outside the Island out of $120,000 total, supported by the invoices and the client records. Row three: local spending, supported by the ledger.
The sheet shows the studio at 78 percent eligible income, and the owner asks the advisor whether a $26,000 job for a Puerto Rico hotel changes anything for the year. Because the question arrives in April and not in January of the next year, there is still room to adjust the plan. That is the whole value of the exercise: to see a problem while it is still small.
Keep each quarterly sheet and its supporting documents in the decree folder. When the annual report is due, the advisor stitches four sheets together instead of starting from scratch.
The decree annual report means hunting a whole year of invoices and contracts.
Archive your PDF invoices and keep contracts organized per client so you can prepare the decree report with your advisor. The products do not produce the annual report or verify decree compliance.
It is hard to show which income comes from clients outside Puerto Rico.
Note each client’s country in your CRM and on your invoices, and separate that income in your books with your CPA. There is no automatic report by income origin.
Nobody remembers how many jobs were promised in the application.
Register each employee in 4softhr with job title and start date, so the headcount you hand your advisor comes from records and not from memory.
Online invoicing with PDF invoices and an invoice archive. It does not file with the local tax authority; e-invoicing integration is available for Romania only.
E-signed agreements with full version history.
HR and time tracking: employees, leave and timesheets. Payroll calculation is available for Romania only.
It is an individual agreement with the Government of Puerto Rico, under the Incentives Code, granting favorable tax treatment to the eligible income of services rendered from the Island to clients outside it. It carries conditions and a periodic report. Whether a business meets them depends on the facts and the decree’s terms, and an advisor evaluates that.
The application is filed with the Incentives Office of the Department of Economic Development and Commerce, following the forms, requirements and fees that office publishes. It pays to prepare the business, employment and projections with an advisor before filing, because what you state in the application becomes a commitment you must later prove with records.
An export decree applies only to eligible income. Income from clients in Puerto Rico or other activities falls outside that rate and is taxed under the general rules. That is why it matters to separate, in invoices and books, which client and which service each income item belongs to, and to review the split with your CPA each quarter.
No. They provide PDF invoices, signed contracts, staff records and a CRM, all of which serve as documentary backup. Verifying compliance, preparing the annual report and any communication with the Incentives Office are your responsibility and your advisor’s, and they take place outside the system, using the documentation you have kept during the year.
Invoices, contracts and staff records stored; compliance is validated by your advisor.
