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Air Transportation
Tax incentive for air transportation companies operating in Puerto Rico, including airlines, cargo carriers, and aviation services.
8 min
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Section Code:
2110.01
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Purpose:
Other Industries — 2110.01
Overview
The Air Transportation designation under Section 2110.01 of Act 60-2019, as amended, provides preferential tax treatment for air transportation companies that establish or expand operations in Puerto Rico. This designation supports aviation industry development including airlines, cargo carriers, charter services, and aviation support businesses.
Qualifying air transportation operators may receive reduced corporate income tax rates, property tax exemptions on aircraft and facilities, and municipal tax relief. The program attracts commercial airlines, cargo carriers, aircraft maintenance operations, and aviation service providers.
The key distinction of this designation is its focus on air transportation operations rather than airport infrastructure or general transportation. Air transportation businesses operate aircraft, provide aviation services, or support air travel and cargo movement.
Puerto Rico's geographic position as a Caribbean hub makes air transportation critical for connectivity and commerce. The incentive supports private investment in air services that enhance Puerto Rico's accessibility and economic integration.
Key Benefits
Reduced Corporate Income Tax Rate
Air transportation operators may receive reduced corporate income tax rates on qualifying aviation income. Rates depend on service type and decree terms.
Property Tax Exemptions
Aircraft, hangars, maintenance facilities, and aviation equipment may receive property tax exemptions, reducing the cost of maintaining aviation assets in Puerto Rico.
Municipal Tax Relief
Aviation operators may receive exemptions from municipal license taxes on revenues from air transportation services.
Strategic Location Benefits
Puerto Rico's position provides access to Caribbean, Latin American, and North American markets, supporting both passenger and cargo operations.
Requirements & Obligations
Aviation Licensing and Certification
Operators must maintain all required aviation licenses, certifications, and safety approvals from federal and Puerto Rico aviation authorities.
Puerto Rico Operations
Air transportation activities must be based in or substantially connected to Puerto Rico. Aircraft registration, crew bases, maintenance operations, or route structures must demonstrate genuine Puerto Rico presence.
Business Structure
Operators must establish Puerto Rico legal entities and register with relevant authorities.
Safety and Regulatory Compliance
Strict compliance with aviation safety regulations and operational standards is required throughout operations.
Employment Requirements
Aviation operators must employ Puerto Rico residents in flight operations, maintenance, and administrative roles.
Reporting Requirements
Annual reports must document aviation operations, flight activities, revenues, and employment.
How to Apply
The application process typically requires eight (8) to fifteen (15) months given aviation regulatory complexity. Operators begin with feasibility analysis and regulatory consultation.
Applications include detailed aviation operation plans, aircraft information, route structures, safety programs, and financial projections. Aviation regulatory approvals must be demonstrated.
Review evaluates operational viability and regulatory compliance. Upon approval, decrees specify terms. Operators must complete setup and commence aviation operations.
This information is educational and should not be considered legal or tax advice. Applicants should consult with qualified legal and tax professionals familiar with Puerto Rico incentive programs before making any business decisions or submitting applications.
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