Puerto Rico Manufacturing Proposition Analysis
Track and continue to assess key elements of
federal legislation
Important terms
that determine scope
Related impacts to track
for outreach strategy
Additional considerations
to monitor closely
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Qualified employee
(e.g., full-time vs. part-time, local talent)
Scope of wages and benefits to include
(e.g., salary, healthcare)
Allowed depreciating property
(e.g., real property, personal property,
short/medium/long-life property)
Qualified manufacturing line/facility
(e.g., line/facility moved to the US)
Geographic scope of applicability
(e.g., including US territories)
Qualifying companies
(e.g., CFCs, domestic branches, CDMOs)
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Defined list of essential products
Could include non-finished products (e.g. sub-
assembly, excipients)
• Biannual review of pharma and medtech
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supply chain resilience by Dept HHS
Degree to which SecHHS empowered to
redefine list
(e.g., item must be at least 5x required level for
shortage designation before considered for removal)
Carry forward/back allowances for credits
(e.g., %/$ of allowable credits, furthest period for
carry forward/back)
Effective date of Dec. 2019
(e.g., bill goes into effect immediately)
1. Base Erosion and Anti-Abuse Tax (BEAT) 2. Currently not in any proposed legislation 3. Currently proposed in HR 6930 4. Elimination of excise
tax could increase in PR source income tax to cover shortfall. Unlike excise tax, source income tax payments can be used for foreign tax credit
purposes; increasing credit cap would enable companies, to use more of these incremental tax dollars as foreign tax credits against GILTI
Source: Congress. Gov, synthesized expert interviews, BCG analysis
Amend BEAT1 to reduce
BEAT liability for US
companies with PR CFCs²
Changes could stimulate
high-margin US companies
(e.g., Brand Cos., OEMs) to
invest more in PR via CFCs
Increase foreign tax credit
cap vs. GILTI (e.g., from
80% to 100%)³
Magnitude of impact
potentially tied to changes
in excise tax4
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