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Tax Avoision

Going For My Morning Soak in the Seaside Pool at the Yacht Club Marina

Palmas del Mar is a gated community here on the east shore of Puerto Rico. Actually, it’s double gated. You have to go through a staffed main gate to get into the development. The development consists of many separate houses, villages, condos, and hotels, plus the marina, with a golf course meandering around them. Each community or hotel has it’s own staffed gate, including the marina. The landscaping is well maintained, there are no stray dogs and no trashed out buildings or streets. And there are sidewalks and walkways, the true expression of a luxury community in the Caribbean, apparently.

So this is a high end community for the island. The Yacht Club here has a tiki bar that serves what the locals call the best burger on the island. And it is pretty damn good. But the locals complain that if you don’t have a boat parked here you can’t get in, they hardly ever open it up to the public. Now here is the kicker, the seasonal rate (which we are in) is amazingly reasonable. So we get quite a bit of luxury living without having to pay the steep prices.

Many of the “locals” we’ve met here are expats from the states. Well, “expat” isn’t a proper description since we are in U.S. territory, but nevertheless, it is a bit different here. All PR citizens are U.S. citizens though they cannot vote in national elections and do not have voting representatives in congress. So their law is a mix of U.S. federal law and some Puerto Rican law.

Apparently there is a huge tax advantage for businesses here: There is no capital gains tax. Zero. For personal income tax it is pretty low, like 5% or something. Many of the people we’ve met here moved their business here to avoid paying these taxes, which is a huge advantage. Thus the title of this post, tax avoision. It is a real word. I learned it from watching The Simpsons.

Walking Path Through the Beachside Trees

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