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1 Alan Cole, Puerto Rican Competitiveness and Pillar Two 1 (2024)

handle is hein.taxfoundation/porcncv0001 and id is 1 raw text is: * TAX FOUNDATION Puerto Rican Competitiveness and Pillar Two Alan Cole Senior Economist July 2024 Key Findings • Puerto Rico has long relied on low taxes to attract real investment and profit shifting. • Pillar Two, the global minimum tax agreement, presents a threat to Puerto Rico's model. • Puerto Rico may be well served by designing a new competitive tax code that works within the bound- aries of Pillar Two. • Various constraints on Puerto Rican policy and conflicting interests have made it difficult to enact a comprehensive legislative response. • The US federal government could be more helpful in representing Puerto Rico in international tax poli- cy matters. • The Puerto Rican experience thus far exhibits some of Pillar Two's drawbacks. Jurisdictions pursuing a tax-competitive model are incentivized to adopt complex and opaque legal structures rather than simple, low rates. The Tax Foundation is the world's leading nonpartisan tax policy 501 (c)(3) nonprofit. For over 80 years, our mission has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity. TAX FOUNDATION 1325 G STREET, NW, SUITE 950, WASHINGTON, DC 20005 202-464-6200 1 taxfoundation.org