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Congresswoman Calls For Action Against Using Puerto Rico As Tax Haven

Nydia Velaquez, a Congresswoman calls for tougher actions against using Puerto Rico as a tax haven from billionaires that perceive it as a shelter so let’s read further in today’s latest cryptocurrency news. The Congresswoman calls for actions because there’s growing hostility to Puerto Rico’s crypto millionaires but it is unlikely that the policies will […]

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Nydia Velaquez, a Congresswoman calls for tougher actions against using Puerto Rico as a tax haven from billionaires that perceive it as a shelter so let’s read further in today’s latest cryptocurrency news.
The Congresswoman calls for actions because there’s growing hostility to Puerto Rico’s crypto millionaires but it is unlikely that the policies will change anytime soon. The stories about millionaires moving to Puerto Rico became quite common in recent years. The attraction lies in the sandy beaches, the mild climate but most importantly because it is a place for US residents to avoid paying taxes. However, not everyone is happy about it. Brooklyn lawmaker Nydia Velazquez complained that the island has become a haven for rich crypto users and asked the Treasury Department to go after investors that are trying to use Puerto Rico as a tax shelter.

Ruh oh. Rep: @NydiaVelazquez asks if Congress can help IRS “go after crypto investors trying to use Puerto Rico as a tax shelter”
— Jeff Roberts (@jeffjohnroberts) February 8, 2022

Velazquez’s comments came during the hearing of the House Financial Services Committee that was examining the broader topic of stablecoins. Now, the Congresswoman is from Puerto Rico, and like most that live in New york’s district where she is, they maintain strong ties with the island. Her remarks elicited a strong reaction on Twitter where most applauded her wish to go after people that they portray as wealthy and unwanted squatters. Others even offered more nuanced takes and pointed out that the law attracting millionaires to Puerto Rico doesn’t only favor the crypto holders but those that are looking to tax shelter in general.

Can they “help”? This is asinine….the IRS has authority to do this as it stands, so does the PR tax authority (Hacienda). I have never seen such lunacy. If you audit those granted exemption, you will find many do not meet criteria. It’s not simply having a house here pic.twitter.com/7L4XuuFbZC
— Raoul Kountz (@raoulkountz) February 8, 2022

The law in question allows for investors to claim a no tax on capital gains which is a huge benefit for Americans that live on the mainland and can face federal capital gains rates as high as 37 percent but as some noted, taking advantage of the new law involves a lot more than just turning up in Puerto Rico. Others voiced similar concerns as one Boston law firm noted that simply owning property in Puerto Rico is not really enough to claim the tax exemptions and that in any case, the law applies to capital gains that were earned after one person moves to the island which means that someone that moved there back in January, would not be able to avoid the axes on their crypto profits.
In the meantime, the Puerto Rico governor approved a 2020 law that makes applying for the tax exemption more expensive.

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