Appendix C
Glossary of Key Terms
| Term | Definition |
| Act 60 | Puerto Rico Incentives Code of 2019 — consolidation of all PR tax incentive legislation |
| Bona Fide Residency | Genuine Puerto Rico residency meeting the IRS three-part test: presence, tax home, and closer connection |
| Chapter 2 (Act 60) | Individual Resident Investor provisions — personal investment income tax benefits |
| Chapter 3 (Act 60) | Export Services provisions — business tax benefits for companies exporting services from PR |
| Closer Connection Test | IRS test evaluating whether your primary ties are to Puerto Rico rather than the U.S. or another country |
| DDEC | Puerto Rico Department of Economic Development and Commerce — administers Act 60 decrees |
| Decree | The formal legal contract between an Act 60 applicant and the PR government specifying benefits and obligations |
| Export Services | Services provided by a PR-based business to clients outside Puerto Rico — eligible for Chapter 3 benefits |
| IRI | Individual Resident Investor — the designation for Act 60 Chapter 2 individual participants |
| 183-Day Rule | Minimum days of physical presence in Puerto Rico required annually to maintain bona fide residency |
| PR-Sourced Income | Income generated from sources within Puerto Rico — only this income qualifies for Act 60 exemptions |
| Tax Home | Primary place of business or professional activity — must be in Puerto Rico for the tax home test |
| Section 933 | U.S. federal code provision that excludes PR-sourced income from federal income tax for bona fide PR residents |
| CECFL | Puerto Rico commission certifying nonprofits that qualify for the charitable donation requirement |