Corporate Tax Inversions

9-17-2014: US Congress keeps jerking around with ideas like making research tax credits or college tuition permanent that already exist in a temporary state or penalizing/forcing businesses not to move offices overseas. They need to modify the tax code to be simpler and not so burdensome on businesses which simply pass those tax burdens onto consumers and taxpayers.

8-21-2014 comments: Once companies go overseas thru tax inversion and they commit crimes that are not detected unless a whistleblower outs the action – then the whistleblower will not be protected from retaliation under US laws.

An “inversion” is often when a US company agrees to buy another non-US company and relocate their corporate operations outside the US borders to avoid high 35% US corporate income taxes, provided the new digs have a much lower income tax rate. As part of this transaction, shareholders must receive at least 20% of the resulting entity…which subsequently results in profit on which the shareholder must be taxed.

This is happening alot in the pharmaceutical world but may spread to other industries based upon the measured success of these early adopters.

The law firm of Skadden, Arps, Slate, Meagher, and Flom, LLP are behind about 80% of the US inversions.

WSJ, 8-6-14, B1.

Note of concern: Washington DC politicians are involved with several efforts to arrive at possible prevention and protection of disappearing US corporate tax revenue. I just wonder how much they will try to screw this up and what loopholes they will eventually create.

This entry was posted in Uncategorized. Bookmark the permalink.