Research and Development
Tax incentive to foster research and development activity conducted at local universities in Puerto Rico, allowing qualified Principal Investigators or a Co-Principal Investigator to seek tax exemptions for salaries earned from eligible R&D research grants. The main objective of this incentive is to attract and retain competitive researchers to strengthen Puerto Rico’s performance in science and technology and the Island’s position in the knowledge economy.
Incentive Eligibility
To qualify for the Act 60 incentive, the following eligibility criteria must be met:
Research Activity: The grant must be awarded:
- For the conduct of research, defined as creative work undertaken on a systematic basis and designed to increase the stock of knowledge in a particular science field.
- Through a contractual agreement between the Academic Institution and the granting agency (including federal, state or private entities that promote competitive scientific investigation) for the completion of specific research goals.
- Obtained competitively through programs that are open (unrestricted) to the general scientific community and that are subject to same evaluation scrutiny as, for example, NIH’s R01 grant mechanism.
Institution Eligibility:
- Only research grants received by Institutions of higher education, licensed by Puerto Rico’s Higher Education Council and accredited by the Middle States Association, will be eligible for tax exemption. The Institution may participate as prime recipient or as sub-awardee of the eligible grant.
Investigator Eligibility: The applicant researcher:
- Must have been a resident of Puerto Rico during the tax year under consideration.
- Employed by an Academic Institution, as defined by the law.
- Submitted a proposal as a Principal Investigator (PI) or Co-Principal Investigator (Co-PI) that resulted in a research award.
For continuation grants, or grants that have been already submitted and approved by the Trust as eligible, the following documentation is required:
Required documentation
For new grants submitted for the consideration of the Trust, the following documentation is required:
Documents
- Act 60
- Application for Salary Tax Incentives for Researchers Act 60-2019 – Section 2021.04
- Documentos Suplementarios – DDEC
- SECTION B : EDUCATIONAL INSTITUTIONS (Form to include additional projects)
- Continuation Case Form
- Lista de Representantes Institucionales UPR
- Law 101 Ruling as issued as of 2009 by Departamento de Hacienda
Definitions
Eligible Scientific Research– Means any research conducted by the University of Puerto Rico or any Higher Education Institution that receives a grant upon peer-review of a grant application in an open competition to obtain such grant, in order to carry out a research project or other similar project including grants for training, capacity development, and workforce development from any of the organizations that compose the National Institutes of Health, or under similar programs or mechanisms sponsored by any other federal agency that promotes competitive scientific research, including, but not limited to, the National Science Foundation, the Energy Department, the Department of Defense, NASA, NOAA, the Environmental Protection Agency, among others. It shall also include grants from competitive research applications from private foundations, other nonprofit organizations, or private businesses providing competitive research and development grants. The competitive research grants limited to underserved minorities, according to the definition of minorities at the federal level, shall also be deemed eligible. Research subawards where the principal investigator is a Domestic Person shall also be deemed eligible.
Eligible Investigator or Scientist – Means a Domestic Person, during the Taxable Year, hired by the University of Puerto Rico or any other Higher Education Institution authorized to operate in Puerto Rico, who is engaged, among other teaching duties, in conducting Eligible Scientific Research, and has submitted a scientific research application to an organization such as those described in the definition of Eligible Scientific Research, and who, upon the approval of said research application, causes the educational institution to be awarded a research grant, pursuant to the definition of Eligible Scientific Research, which amount covers research costs, including, among others, the compensation of the Investigator and key personnel, the purchase of equipment and supplies, publications, and other related expenses, as applicable. Except in the case of Multiple Principal Investigators or Multi PI’s, only one individual shall be eligible for this deduction per grant approved, pursuant to the definition of Eligible Scientific Research, including research subawards.
Multiple PI and Co-PI: Some sponsors use the term Co-PI or Multiple PI to indicate the role has equal responsibility and authority as the lead PI (NIH uses the term Multiple PI, and NSF uses the term Co-PI).
Co-investigators or Co-I: This title is used to indicate the individual makes significant contributions, but does not have overall responsibility and authority for the project. They are NOT considered PD/PIs and will not be considered for the incentive.
Process
To be considered, ALL cases must be sent by the institution’s representative (person in charge of collecting and reviewing documents related to the incentive) to the following email address:
