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US business blasts Treasury move against tax inversions

US business blasts Treasury move against tax inversions
Global
24 Sep 2014

First published in AFP newswire, 24 September 2014

US business groups on Tuesday blasted as counter-productive the government's moves to curb tax inversion mergers that allow a company to escape US taxes. But analysts said the rules could prove only partly successful at stemming corporate flight, and businesses involved in inversion deals had mixed reactions.

For instance, they can still benefit simply by rebasing into jurisdictions which offer a lower corporate tax rate than the maximum 35% in the United States.

The Treasury is nevertheless still asserting its right to tax the worldwide income of US companies, which many other countries do not do.

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With its approach towards offshore cash, the US is creating an uneven playing field and is losing out to those jurisdictions who recognize the benefits of a forward-looking tax policy.

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