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Businesses lambast US Treasury move against tax inversions

Businesses lambast US Treasury move against tax inversions
Global
24 Sep 2014

First published in Middle East North Africa Financial Network, 24 September 2014

Moving after Congress failed to act to stem a rising tide of inversion deals, the Treasury mainly took aim at one inversion benefit, the ability of the post-merger company to make use of profits hoarded offshore by a US company without paying US taxes on them.

Companies engaged in some of the more than 200 billion worth of inversion deals announced this year had mixed reactions. Fast-food giant Burger King saying it would go ahead with its 11 billion takeover of Canada's Tim Hortons, saying moving its tax address elsewhere is not the key point.

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Taxand's Take

The move will make it harder for companies to undertake inversions, but it does not remove all the benefits.For instance, they can still benefit simply by rebasing into jurisdictions which offer a lower corporate tax rate than the maximum 35% in the US.

Taxand's Take Author