Sin Comillas

Puerto Rico has portrayed itself as a poor struggling Caribbean island while giving $100s of billions in corporate tax giveaways to global pharmaceutical firms over multiple decades & then declaring bankruptcy #muniland. "Estimates of $100 Billion in Local Tax Breaks: Between 2017 and 2023, the Puerto Rican government distributed roughly $100.5 billion in tax breaks to its manufacturing sector—of which the pharmaceutical industry is the dominant cornerstone [source: see below from Gemini]." Pillar Two is an international tax framework established in 2022 by the OECD/G20 that sets a 15% global minimum effective tax rate for large multinational enterprises. Key Details: Target Audience: MNE groups with consolidated annual revenues of €750 million or more in at least two of the previous four fiscal years. Core Goal: To stop "base erosion and profit shifting" (BEPS), where companies move profits to low-tax havens to lower their overall tax burden. Minimum Rate: A 15% effective tax rate (ETR) calculated on a country-by-country basis. If a jurisdiction taxes a company below 15%, a top-up tax applies. Main Enforcement: Mechanisms: Pillar Two uses three interlocking rules: +Qualified Domestic Minimum Top-up Tax (QDMTT): Allows the country where the low-taxed profits are earned to collect the top-up tax first. +Income Inclusion Rule (IIR): Imposes a top-up tax at the parent company level if a foreign subsidiary's income is taxed below 15%. +Undertaxed Profits Rule (UTPR): Acts as a backstop; if the parent company's jurisdiction doesn't tax it at 15%, other participating countries can deny deductions or adjust taxes. America has not formally adopted Pillar 2 [which was a major political loss for Janet Yellen] and has left it to PR to decide how to implement the global accord. In mid Oct the PR Chamber of Commerce asked the PR Legislature to pass a workaround to Pillar 2 global tax framework which would collect the "top up" tax locally from the global pharmaceutical companies, deposit the tax revenues in a separate PR fund and essentially recycle the tax revenues back to the corporations who paid the tax through cash grants. This mechanism, of course, would violate the global accord and the nations where the corporations are headquartered could impose the "top up" tax themselves and keep the revenues. Gemini's AI analysis of much annual profit multinationals are offshoring to PR share.google/aimode/GlqIUh2y… @TaxFoundation analysis taxfoundation.org/research/a…