Act 60 Consulting Income Sourcing, Simplified

The number one rule for Act 60 consulting income is simple: where do you do the work? To get the low tax rate, you have to perform your services while you are physically in Puerto Rico. It doesn’t matter where your clients are. If you’re on your laptop in a cafe in Condado, that’s PR-sourced income. If you’re on your laptop in a hotel in Miami, that’s US-sourced income. It’s that straightforward. Our quick check is designed to ask you the right questions about where you work to see if your income sourcing aligns with Act 60 rules. We make it easy to understand this critical concept without needing a law degree.

Many people think that as long as their clients are outside of Puerto Rico, their income is automatically considered export services income. That’s a common mistake. While you do need to be providing services to non-PR entities, the location of your client is only half of the equation. The other, more important half is where you are when you do the work. Think of it this way: you must be IN Puerto Rico, providing services OUTSIDE of Puerto Rico. Both conditions need to be met. Our tool helps you quickly assess if you are meeting both of these requirements, giving you a fast and affordable way to double-check your understanding.

If the Puerto Rico tax authorities or the IRS ever ask questions, you’ll need to prove where you were when you earned your income. This means keeping good records is not optional. Simple things like a calendar with your work locations, travel receipts, and notes on your project files can make a huge difference. You don’t need a complex system. You just need to be consistent. Our compliance check can give you a simple checklist of the types of records you should be keeping to be prepared. A few minutes of organization can save you a lot of headaches later.