Puerto Rico Tax-Haven Status, R&D Credit Weakened By Tax-Reform Bill
Under tax reform legislation recently passed by Congress, a 20% tax on products made in domestic territories will adversely affect the many device firms with Puerto Rican plants that currently enjoy a lower, 4% tax rate on profits. And a second tax provision usually relied upon by medtech companies, the R&D tax credit, also loses ground under the final Senate bill passed Dec. 2.
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Members of a tax reform bill conference committee repealed a controversial corporate alternative minimum tax, which will allow more device firms to take advantage of research & development tax credits. That was one of several changes made to help win the tax bill's final passage, anticipated this week.
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