Compliance11 min2025-02-15

Act 60 Annual Obligations: Complete 2025 Compliance Checklist

Complete guide to all annual obligations under Act 60. DDEC reports, tax filings, charitable donations, employment requirements and deadlines to keep your decree active.

By Alfonso Rodriguez, CPA - Virtus Advisory

Act 60 Annual Obligations: Your Complete 2025 Compliance Checklist

CRITICAL 2025 UPDATE: With Act 60's extension through 2055 and new requirements (4% rate on passive income for post-2026 applicants, certification of 6 years without prior residence), DDEC has updated reporting dates. The 2024 Annual Exempt Report for Act 60 is due November 15, 2025, while Act 20/22 maintains the May 15, 2025 date.

Maintaining your Act 60 decree requires compliance with a series of specific annual obligations. A single oversight can result in fines, penalties, or in the worst case, revocation of your decree.

This guide provides you with the definitive checklist of all your annual obligations, organized by chapter with specific deadlines.

Why Annual Obligations Are Critical

The Cost of Non-Compliance

Real statistics:

  • 95% of decree revocations are due to non-compliance with obligations, not changes in law

  • Average fines for non-compliance: $5,000-15,000

  • Recovery time after revocation: 2-5 years (if possible)

    • What's at Stake

    For a typical investor:

  • Chapter 2 decree saving $200,000 annually

  • Cost of non-compliance: Lose $200,000 + fines

  • ROI of perfect compliance: Infinite

    • For an export company:

  • Chapter 3 decree saving $300,000 annually

  • Cost of non-compliance: Total loss of benefits

  • Compliance investment: $10,000-25,000 annually

    • 2025 Master Compliance Calendar

    Universal Critical Dates

    April 15 - Tax Returns

  • All individual and corporate tax returns

  • Act 60 preferential rate applications

  • NO EXTENSIONS for Act 60 decrees

    • November 15 - DDEC Annual Reports (Act 60)

  • THE MOST CRITICAL DATE of the year for Act 60 decrees

  • All chapters must comply

  • Minimum late penalty: $5,000

  • Note: Act 20/22 maintains May 15 date

    • December 31 - Fiscal Year Closing

  • Compliance with all annual commitments

  • Documentation of year's activities

  • Preparation for next year's reports

    • Chapter-Specific Dates

    Chapter 2 (Individual):

  • December 31: Complete $10,000 in charitable donations

  • December 31: Document 183+ days in Puerto Rico

  • January 15 following: Fourth quarterly estimated payment

    • Chapter 3 (Export Services):

  • Quarterly: Employment reports to Department of Labor

  • Monthly: Minimum employee verification

  • December 31: Document year's exports

    • Chapter 4 (Manufacturing):

  • Quarterly: Production reports

  • Annual: Environmental compliance

  • December 31: Document committed investments

    • Obligations by Chapter: Detailed Guide

    Chapter 2 - Individual Decree

    Obligation #1: Bona Fide Residence

    Requirement: 183+ days physically in Puerto Rico

    How to comply:

  • Document every day in Puerto Rico meticulously

  • Maintain detailed calendar with evidence

  • Keep receipts, photos, activity records

  • Safety margin: Aim for 200+ days

    • Required evidence:

  • Detailed calendars with daily activities

  • Airline tickets (PR entry and exit)

  • Hotel, restaurant, service receipts

  • Photos with timestamps and geolocation

  • Meeting and event records in PR

    • Common mistake: Relying only on day counts without documentary evidence

    Obligation #2: Charitable Contributions

    Requirement: Minimum $10,000 annually

    Eligible organizations:

  • 501(c)(3) registered in Puerto Rico

  • PR educational institutions

  • Community development organizations

  • Approved cultural and artistic entities

    • Best practices:

  • Diversify donations (minimum 3 organizations)

  • Document impact of your contributions

  • Plan strategically (some organizations have better reputation)

  • Keep all official receipts

    • Recommended organizations:

  • Puerto Rico Community Foundation

  • Boys & Girls Clubs of Puerto Rico

  • Puerto Rico Museum of Art

  • University of Puerto Rico (specific programs)

    • Obligation #3: Investment and Economic Presence

    Requirement: Demonstrate real economic nexus in PR

    Key elements:

  • Active bank account in Puerto Rico

  • Documented local investments

  • Participation in economic activities

  • Contribution to local development

    • Required documentation:

  • PR bank account statements

  • Local investment receipts

  • Community project participation

  • Professional organization memberships

    • Obligation #4: Reports and Documentation

    DDEC Annual Report (November 15):

  • Individual compliance form

  • Puerto Rico days documentation

  • Charitable donation receipts

  • Personal financial statements

  • Investment activity declaration

    • Tax Return (April 15):

  • PR individual tax return

  • Capital gains exemption application

  • Exempt income documentation

  • Act 60 specific forms

    • Chapter 3 - Export Services Decree

    Obligation #1: Employment Maintenance

    Requirement: 3-5 full-time employees (per decree)

    Employee calculation:

  • 1 employee 40 hours/week = 1 FTE

  • 2 employees 20 hours/week = 1 FTE

  • Only employees working in Puerto Rico

    • Monthly documentation:

  • Detailed payroll records

  • Specific job descriptions

  • Evidence of work performed in PR

  • Performance evaluations

    • Compliance strategies:

  • Always maintain 1 extra employee for safety

  • Document all employee activities

  • Invest in training and development

  • Create specific and measurable job descriptions

    • Obligación #2: Exportación de Servicios

    Requisito: 80%+ de ingresos de clientes fuera de PR

    Documentación requerida:

  • Contratos con clientes especificando ubicación

  • Facturas detalladas con addresses de clientes

  • Evidencia de servicios prestados desde PR

  • Comunicaciones que muestren trabajo desde PR

    • Mejores prácticas:

  • Mantén ratio 85%+ de exportación (margen de seguridad)

  • Documenta la ubicación de cada cliente

  • Evidencia que el trabajo se realiza en PR

  • Mantén comunicaciones profesionales archivadas

    • Obligación #3: Sustancia Económica

    Requisito: Operaciones reales y significativas en PR

    Elementos necesarios:

  • Oficina física en Puerto Rico (no P.O. Box)

  • Toma de decisiones estratégicas en PR

  • Reuniones de directorio en PR

  • Presencia digital desde PR

    • Documentación:

  • Lease agreement de oficina

  • Minutas de reuniones en PR

  • Photos de facilidades con timestamps

  • Evidencia de presencia gerencial

    • Obligación #4: Reportes Especializados

    Reporte Anual DDEC (15 de Noviembre):

  • Informe de operaciones y exportaciones

  • Reporte detallado de empleos

  • Estados financieros auditados

  • Evidencia de sustancia económica

  • Plan de crecimiento futuro

    • Reportes Trimestrales:

  • Reportes de empleo al Departamento del Trabajo

  • Updates de nómina y beneficios

  • Cambios en estructura organizacional

  • Updates de clientes y contratos

    • Capítulo 4 - Decreto de Manufactura

    Obligación #1: Producción y Operaciones

    Requisito: Mantener operaciones manufactureras activas

    Documentación mensual:

  • Reportes de producción

  • Inventarios de materias primas

  • Records de exportaciones (si aplica)

  • Cumplimiento de estándares de calidad

    • Mejores prácticas:

  • Mantén records detallados de todo el proceso

  • Documenta mejoras en eficiencia

  • Evidencia inversión continua en maquinaria

  • Demuestra crecimiento en capacidad

    • Obligación #2: Empleo e Inversión

    Requisito: Mínimos de empleo según inversión comprometida

    Categorías de empleados:

  • Empleados directos de producción

  • Personal técnico y de I+D

  • Personal administrativo local

  • Supervisión y management

    • Documentación:

  • Payroll detallado por categoría

  • Training records y certificaciones

  • Investment records en maquinaria

  • Evidence de transferencia tecnológica

    • Obligación #3: Cumplimiento Ambiental

    Requisito: Mantener todas las certificaciones ambientales

    Áreas de cumplimiento:

  • Permisos de emisiones

  • Manejo de desperdicios

  • Calidad del agua

  • Estándares de seguridad

    • Reportes requeridos:

  • Reports ambientales trimestrales

  • Certification renewals anuales

  • Evidence de programas de reciclaje

  • Training ambiental para empleados

    • Errores Costosos que Debes Evitar

    Error #1: Asumir que "Cerca es Suficiente"

    Problema: 182 días en lugar de 183, 9,800 USD en lugar de 10,000
    Resultado: Incumplimiento técnico, posibles multas
    Solución: Siempre excede los mínimos por margen de seguridad

    Error #2: Documentación Pobre

    Problema: No mantener evidencia adecuada de cumplimiento
    Resultado: Incapacidad de probar cumplimiento durante auditorías
    Solución: Documenta todo, siempre, en tiempo real

    Error #3: Esperar Hasta Última Hora

    Problema: Preparar reportes 1-2 semanas antes del deadline
    Resultado: Errores por prisa, posible incumplimiento de fechas
    Solución: Comienza preparación 2-3 meses antes

    Error #4: No Entender Cambios Regulatorios

    Problema: Seguir procedimientos obsoletos
    Resultado: Incumplimiento inadvertido con nuevas reglas
    Solución: Mantente actualizado con changes regulatorios

    Error #5: Falta de Sistemas de Respaldo

    Problema: Depender de una sola persona o sistema
    Resultado: Fallos catastróficos cuando hay problemas
    Solución: Sistemas redundantes y múltiples responsables

    Sistemas de Cumplimiento Bulletproof

    Sistema de Documentación Continua

    Rutina Diaria:

  • Log de actividades y ubicación (Capítulo 2)

  • Time tracking de empleados (Capítulos 3 y 4)

  • Record de actividades comerciales

    • Rutina Semanal:

  • Review de documentación de la semana

  • Backup de archivos importantes

  • Check de compliance metrics

    • Rutina Mensual:

  • Reconciliación de todas las métricas

  • Review de progreso hacia metas anuales

  • Identificación de gaps o issues

    • Rutina Trimestral:

  • Preparación de reportes trimestrales

  • Mock audit de documentación

  • Strategic review de compliance

    • Sistema de Alertas y Recordatorios

    Calendarios Automatizados:

  • 90 días antes: Begin preparation

  • 60 días antes: First draft completion

  • 30 días antes: Final review

  • 15 días antes: Final submission preparation

  • 5 días antes: Emergency check

    • Alertas de Métricas:

  • Daily residency tracking (Capítulo 2)

  • Weekly employment verification (Capítulos 3 y 4)

  • Monthly export ratio check (Capítulo 3)

  • Quarterly production targets (Capítulo 4)

    • Team Coordination System

    Roles y Responsabilidades:

  • Point Person: Overall compliance responsibility

  • Legal Counsel: Regulatory guidance y review

  • Accountant: Financial reporting y tax compliance

  • Operations Manager: Day-to-day documentation

  • External Auditor: Annual verification

    • Communication Protocols:

  • Weekly status updates

  • Monthly compliance meetings

  • Quarterly strategic reviews

  • Annual comprehensive audit

    • Métricas de Cumplimiento por Capítulo

    Capítulo 2 - KPIs Críticos

    Residencia:

  • Target: 200+ días en PR (vs. 183 mínimo)

  • Métrica actual: _____ días YTD

  • Proyección anual: _____ días

    • Donaciones:

  • Target: 12,000 USD (vs. 10,000 mínimo)

  • Donado YTD: _____ USD

  • Organizaciones beneficiadas: _____ entidades

    • Presencia Económica:

  • Cuenta bancaria PR: ✓ Activa

  • Inversiones locales: _____ USD YTD

  • Actividades comunitarias: _____ eventos

    • Capítulo 3 - KPIs Críticos

    Empleo:

  • Target: _____ ETC (vs. _____ mínimo)

  • Actual: _____ ETC

  • Turnover rate: _____%

    • Exportación:

  • Target: 85%+ export ratio (vs. 80% mínimo)

  • YTD ratio: _____%

  • Clientes fuera PR: _____ activos

    • Sustancia:

  • Oficina PR: ✓ Operacional

  • Decisiones en PR: ____% de meetings

  • Presencia gerencial: _____ días/mes

    • Capítulo 4 - KPIs Críticos

    Producción:

  • Output YTD: _____ unidades

  • Target anual: _____ unidades

  • Efficiency improvement: _____%

    • Empleo Industrial:

  • Empleados directos: _____ personas

  • Technical staff: _____ personas

  • Training hours: _____ total YTD

    • Inversión:

  • Committed investment: _____ USD

  • Deployed YTD: _____ USD

  • Equipment acquired: _____ items

    • Cómo Virtus Advisory Asegura Tu Cumplimiento

    Compliance Management System

    Automated Tracking:

  • Real-time compliance dashboard

  • Automated alerts y reminders

  • Progress tracking hacia metas anuales

  • Gap identification y correction

    • Document Management:

  • Cloud-based secure storage

  • Automated backup systems

  • Version control y audit trails

  • Easy access para audits

    • Professional Support Team

    Dedicated Compliance Manager:

  • Monthly check-ins

  • Quarterly comprehensive reviews

  • Annual preparation coordination

  • Crisis management support

    • Expert Review Panel:

  • Legal review de todos los reportes

  • Accounting verification

  • Strategic compliance guidance

  • Regulatory update communication

    • Guarantee Program

    Compliance Guarantee:

  • 99.9% on-time submission rate

  • Error-free reporting guarantee

  • Audit support included

  • Penalty protection coverage

    • Peace of Mind Benefits:

  • 24/7 support durante critical periods

  • Emergency response team

  • Regulatory change notifications

  • Best practices updates

    • Tu Plan de Acción Inmediato

    Evaluación Actual (Esta Semana)

    Checklist de Status Actual:

  • [ ] ¿Estás on track con todas las métricas 2025?

  • [ ] ¿Tienes sistemas de documentación robustos?

  • [ ] ¿Tu equipo entiende todas las obligaciones?

  • [ ] ¿Tienes backup plans para emergencias?

    • Preparación 2025 (Próximas 4 Semanas)

    Plan de Acción:

  • Semana 1: Complete compliance audit

  • Semana 2: Implement missing systems

  • Semana 3: Team training y coordination

  • Semana 4: Test run de todos los procesos

    • Monitoreo Continuo (Todo el Año)

    Sistema de Vigilancia:

  • Daily tracking de métricas críticas

  • Weekly team sync meetings

  • Monthly compliance reports

  • Quarterly strategic reviews

    • Conclusion: Compliance as Competitive Advantage

    Act 60's annual obligations are not just boxes to check - they are opportunities to demonstrate your commitment to Puerto Rico and protect your tax advantage long-term.

    Remember:

  • Perfect compliance is the only acceptable option

  • Meticulous documentation is your best protection

  • Proactive systems beat reactive management

  • Professional support is an investment, not an expense

    • Your success depends on:

  • Understanding exactly what's required

  • Building robust systems to deliver

  • Maintaining vigilant oversight

  • Having professional backup when needed

    • Don't gamble with your fiscal future. One failed obligation can cost more than years of tax savings.

    Secure Your 2025 Compliance

    Are you confident you'll meet all your annual obligations? Do you have bulletproof systems to ensure perfect compliance?

    Our Compliance Audit includes:
    ✅ Complete review of your current status
    ✅ Documentation gap analysis
    ✅ Implementation of missing systems
    ✅ Training for your team
    ✅ Monitoring setup for the entire year

    Don't leave your decree to chance. The cost of our service is minimal compared to the value of keeping your benefits secure.

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    *Need help ensuring your 2025 compliance? Our team can review your situation and build systems that guarantee perfect compliance all year long.*

    Need Personalized Act 60 Guidance?

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