PRESS RELEASE FROM DEPT OF TREASURY
Unfair Practice Erodes the U.S. Tax Base
WASHINGTON – Today, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued a notice that takes targeted action to reduce the tax benefits of — and when possible, stop — corporate tax inversions. Companies are increasingly using the technique of inversion, whereby a U.S. based multinational restructures so that the U.S. parent is replaced by a foreign corporation, in order to avoid U.S. taxes. These transactions erode the U.S. tax base, unfairly placing a larger burden on all other taxpayers, including small businesses and hardworking Americans.
Treasury will continue to examine ways to reduce the tax benefits of inversions, including through additional regulatory guidance as well as by reviewing our tax treaties and other international commitments. Today’s Notice requests comments on additional ways that Treasury can make inversion deals less economically appealing. Today’s actions apply to deals closed today or after today.
US cracks down on ‘unpatriotic’ corporations’ tax inversion deals
Sept 24, 2014
ReutersThe American corporations labeled unpatriotic for exploiting loopholes to avoid US taxes may see the so-called tax inversion schemes much less lucrative with the new rules announced by the US Treasury to crack down on the practice.
“Today, in an important first step, the Treasury is announcing targeted action to meaningfully reduce the economic benefits of corporate inversions, and when possible, stop them altogether,” US Treasury Secretary Jack Lew, said in a statement on Monday.
A number of US corporations were labeled “unpatriotic” for engaging in tax inversion, where an American company buys up a foreign one and then moves their headquarters to the host country to take advantage of the lower corporate tax rates.