Puerto Rico Implements a Preferential Tax on Blockchain Verification for Digital Assets

02/28/2023 10:05 • Digital Disruptors • 144 views

It is reported that Puerto Rico’s Ministry of Economic Development and Commerce (DDEC) has issued a guide to digital assets based on blockchain technology and blockchain verification, which points out that a preferential tax rate of 4% will be imposed on “pledge as a service” (any entity participating in blockchain verification will be subject to this ratio). The guide also provides definitions for blockchain verification, pledge, mining, digital assets, etc., which is the first time that Puerto Rico government agencies have clarified relevant concepts, It aims to provide more certainty for individuals and companies in the Web3 industry. （globenewswire）

Puerto Rico will levy a preferential tax rate of 4% on pledge as a service

Analysis based on this information:

Puerto Rico has become one of the first institutions to implement a preferential tax rate of 4% on “pledge as a service” for entities participating in blockchain verification. The Ministry of Economic Development and Commerce (DDEC) has issued a guide that defines blockchain verification, pledge, mining, and digital assets, providing more certainty for individuals and companies in the Web3 industry.

According to the new guidelines, if an entity wishes to participate in blockchain verification in Puerto Rico, it will be subject to the preferential tax rate of 4%. This means that companies can significantly reduce their tax liabilities when using blockchain in their operations. The move will likely see businesses shift their focus towards Puerto Rico as a hub for their blockchain operations.

The clarification of terms and definitions in the guide is expected to help individuals and companies navigate the complexities of blockchain technology with more certainty. The guide maps out the meaning and measurements of blockchain verification, pledge, mining, and digital assets, offering a comprehensive reference tool to support businesses decision-making processes.

It is also worth noting that this is not Puerto Rico’s first attempt to attract blockchain-related firms. In 2018, Governor Ricardo Rossello signed the “Puerto Rico Blockchain Opportunity Act” into law, providing tax incentives to attract blockchain companies to Puerto Rico. The new guidelines further solidify the local government’s intention to create a welcoming environment for blockchain-related firms in Puerto Rico.

In conclusion, Puerto Rico’s new guidelines and the preferential tax rate of 4% on “pledge as a service” is a remarkable move by the local government, facilitating the adoption of blockchain technology and digital assets. It is possible that other governments will soon follow Puerto Rico’s lead in an effort to attract companies active in the blockchain industry who are seeking tax incentives and certainty.

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Puerto Rico Implements a Preferential Tax on Blockchain Verification for Digital Assets

Puerto Rico will levy a preferential tax rate of 4% on pledge as a service

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