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The island’s Treasury Department has provided the private sector, scholars, and the general public until October 10 to offer their feedback on the potential adoption of the GloBE Rules in Puerto Rico.
On September 23, the Treasury Department initiated a public consultation regarding the implications of the Pillar Two Rules in Puerto Rico.
The GloBE Rules are set to be integrated into local tax law to guarantee that multinational entity groups (MNE Groups) with annual revenues reaching $830 million or more face a minimum tax rate of 15%, irrespective of the jurisdictions in which they operate. MNE Groups functioning in Puerto Rico under tax incentive programs like Act 135-1997, Act 73-2008, and Act 60-2019— which typically result in effective tax rates lower than 15% due to individual tax incentives—are expected to encounter additional tax burdens on their Puerto Rico activities.
Over the past year, numerous MNE Groups have been advocating for the Puerto Rico government to formulate a strategy to mitigate the effects that implementing the Pillar Two Rules in various jurisdictions will have on their operations in Puerto Rico and the territory’s industrial development initiatives.
This public consultation signifies that inaction is not viable, and input from stakeholders, private sector entities, advisors, academics, and the broader public regarding the ramifications of the Pillar Two Rules in Puerto Rico is sought.
