Businesses Operating In Puerto Rico Must Consider Pillar Two

Puerto Rico's unique status as a US territory impacts its decision-making on the OECD's global minimum tax, known as Pillar Two. If implemented in its proposed form, Pillar Two would impose a tax of at least 15% on all companies with consolidated revenue of at least 750 million euros ($814 million).

If Puerto Rico doesn't adopt Pillar Two or chooses not to apply it to holders of Act 60 tax benefits, other countries where Puerto Rico-headquartered entities operate could impose tax on what, in effect, is Puerto Rico source income. Businesses concerned that Pillar Two might apply to them should consider whether and how to restructure their businesses to address or avoid its application.