US Treasury greenlights changes to bill that would replace excise tax on CFCs

The United States Department of the Treasury

By The Star Staff

The island Treasury Department announced Wednesday that the U.S. Department of the Treasury has endorsed changes introduced in the commonwealth House of Representatives to a bill that will replace the excise tax paid by local controlled foreign companies (CFCs) in Puerto Rico.

Treasury Secretary Francisco Parés Alicea said the concern of the federal Treasury Department revolved around an amendment that reduces the tax burden under Act 154 and that could alter the agreement reached.

However, after making “a complete evaluation and after countless discussions, Treasury staff recognized that the changes in the bill will not affect the new guidelines to be issued, which will govern foreign companies from the time the new regulation comes into effect,” the official said.

Parés Alicea highlighted that, following the instructions of Gov. Pedro Pierluisi Urrutia, the Treasury Department team had held talks with both the Legislature and the federal Treasury throughout the day in order to achieve a consensus on such important legislation.

“In addition to obtaining the Treasury’s endorsement of the changes, we reviewed the estimate of the fiscal impact of House Bill 1367, considering the amendments introduced, and we believe that the most recent version also complies with the principle of neutrality contained in the Fiscal Plan,” the Treasury chief said.

Parés Alicea called on all the parties involved in the evaluation of the legislation to continue working until the measure is finally approved, putting the interests of Puerto Rico first and protecting the hundreds of jobs that CFCs represent.