US lawmaker targets crypto investors using Puerto Rico as a tax haven
A House of Representatives member has proposed legislation to prevent investors from using Puerto Rico as a crypto tax haven. Representative Nydia Velázquez introduced the Fair Taxation of Digital Assets in Puerto Rico Act, which would amend local laws to require certain investors to pay local and federal taxes on capital gains from digital assets. The bill aims to make cryptocurrency income subject to federal tax laws. Velázquez stated that the influx of crypto investors has negatively impacted Puerto Rico's economy, driving up housing costs and contributing to poverty. Puerto Rico has been a tax haven since 2012, attracting significant investment. Velázquez's office estimates a potential loss of $4.5 billion in revenue from 2020 to 2026 due to existing tax incentives. Governor Jenniffer González-Colón proposed extending Act 60 until 2055 with a reduced capital gains tax rate. The political viability of Velázquez's legislation in the Republican-controlled House or Senate remains uncertain.
