Puerto Rico's 4% tax hikes on foreign companies slammed by PhRMA and BIO

As part a new legislation that was signed this week by the government of Puerto Rico, Law 154, it is proposed to levy a 4% tax on foreign corporations. Puerto Rico’s Governor Luis Fortuno unveiled the fiscal package as part of an economic development and budget-deficit reduction plan for the commonwealth.

The plan will provide tax relief for the current 2010 tax year, and starting January 1, 2011, would reduce individual tax rates by 50% and 30% for businesses, providing an average of $1.2 billion in annual tax relief during the next six years, according to the Puerto Rico Federal Affairs Administration (PRFAA).

According to a Reuters report, the tax would target between 40 and 50 firms operating in Puerto Rico that make more than $75 million annually. The measure is scheduled to take effect January 1, 2011 and run through 2016 with a tax levy of 4% in 2011, 3.75% in 201, and 2.75% in 2013, according Reuters.