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US Anti-Inversion Regulations - Turning Tax On Its Head

Source: tax-news.com/features/US_AntiInversion_Regulations__Turning_Tax_On_Its_Head__573904.html - Nov 4, 2016

Lawmakers and the Government in the United States have had several tries at staunching the flow of corporate "inversions" over recent years, but demonstrably they have failed, as recent developments plainly show. Now the US Treasury is attempting to deliver the coup de grâce to inversions, in the form of new tax regulations released in final form on October 13, 2016.

What's A Corporate Inversion And What Are They Controversial?

Simply put, corporate inversions have been used by US companies when bidding for (generally smaller) foreign companies, as a means of moving away from the high American 35 percent corporate tax rate. A company that merges with an offshore counterpart can move its headquarters abroad (even though management and operations may remain in the US), and take advantage of the lower corporate tax rates in foreign jurisdictions as long as at least 20 percent of its shares are held by the foreign company's shareholders after the merger.

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Category: General Business