June 17, 2012
Tax Implications for U.S. Multinationals if Greece Drops Euro
With Greeks heading to the polls tomorrow and the future of Greece’s membership in the euro zone in question, there’s been a lot of talk about taxes—or more precisely, how Greek tax evasion has contributed to the country’s current fiscal woes. It turns out, however, that for tax geeks there’s another issue here: should Greece drop the euro, U.S. multinationals could face tax complications, as Ramon Camacho, a principal specializing in international tax issues at McGladrey, the nation’s fifth largest accounting firm, explains in the guest post below. He points out that unless the IRS issues a regulation providing special relief (as it did in 1999 when the Euro was adopted) a Greek switch in currency could force companies to recognize taxable gains, even where no cash is received.
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