All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Inversions - special focus

inversions-c.png

Between 1983 and 2004 there were 29 inversion transactions out of the US. In the decade following, almost 50 companies restructured using the method. With foreign profits trapped offshore by an outdated, worldwide system which would hit them with a tax on repatriation, as well as a high tax rate, the temptation to consider an inversion is proving too much for US companies, particularly those in the highly-mobile pharmaceuticals sector. Whatever the motivation, inversions are in vogue. ITR’s special report looks at the knock-on impacts of the current wave of inversions, including shareholder pressure to consider an option they see their rivals pursuing and the possible inflammation of the tax morality debate in the US. We also bring you exclusive insight as to why Danaher is not looking to invert.

Download the special report as a PDF

The past month has seen a growing number of US politicians and legislators crying foul at the practice of inverting. President Obama has described inverters as “fleeing the country to get out of paying taxes”, while Jacob Lew, US Treasury Secretary, has called for a greater sense of “economic patriotism”. Democrats are more adamant about curbing the restructuring technique immediately, while Republicans, for the most part, want to see action under the umbrella of comprehensive tax reform. Sander Levin, his brother Carl, and Ron Wyden, Senate Finance Committee chairman, are among those to have proposed specific anti-inversion legislation, including legislation that would have retrospective effect to May 8 2014. Efforts to reform the US tax code indicate the crawling pace of change on Capitol Hill, but there is no denying there is a narrowing window of opportunity for taxpayers already looking at restructuring, or considering a merger or acquisition, to think about inverting.

Check out our infographic on page 5 to see how pharmaceuticals companies are leading the inversions charge, and review our insights as to which company in the sector could be next to invert.

Engage in the debate on social media: you can join our Facebook or LinkedIn group to share insights with fellow professionals, or tweet @Intltaxreview using #inversionsITR

Twitter

Tweet this         

Twitter
#inversionsITR         
LinkedIn
LinkedIn group

Contents

inv1.png

July 18 2014

inv2.png

July 4 2014

inv3.png

July 18 2014

Download this special report as a PDF

Further reading

More from across our site

ITR is delighted to reveal all the shortlisted firms, teams and practitioners – winners will be announced on August 25
Multinational enterprises run the risk of hefty penalties if the company in question fails to register for VAT when providing electronic services in South Africa.
Tax directors have urged companies to ensure they have robust tax risk management controls when outsourcing tax functions.
Japan reports a windfall from all types of taxes after the government revised its stimulus package. This could lead to greater corporate tax incentives for businesses.
Sources at Netflix, the European Commission and elsewhere consider the impact of incoming legislation to regulate tax advice in the EU – if it ever comes to pass.
This week European Commission officials consider legal loopholes to secure minimum corporate taxation, while Cisco and Microsoft shareholders call for tax transparency.
The fast-food company’s tax settlement with French authorities strengthens the need for businesses to review their TP arrangements and documentation.
The full ALP model will be adopted through a new TP regime, which is set to boost the country’s investments and tax certainty.
Tax professionals have called on the UK government to reconsider its online sales tax as it would affect the economy at the worst time.
Tax professionals have called on companies to act urgently to meet e-invoicing compliance targets as the EU plans to ramp up digitisation.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree