Paul L. Caron

Thursday, October 10, 2013

NY Times: New Corporate Tax Shelter: A Merger Abroad

NY Times Dealbook (2013)New York Times DealBook:  New Corporate Tax Shelter: A Merger Abroad, by David Gelles:

From New York to Silicon Valley, more and more large American corporations are reducing their tax bill by buying a foreign company and effectively renouncing their United States citizenship.

Reincorporating in low-tax havens like Bermuda, the Cayman Islands or Ireland — known as “inversions” — has been going on for decades. But as regulation has made the process more onerous over the years, companies can no longer simply open a new office abroad or move to a country where they already do substantial business.

Instead, most inversions today are achieved through multibillion-dollar cross-border mergers and acquisitions. Robert Willens, a corporate tax adviser, estimates there have been about 50 inversions over all. Of those, 20 occurred in the last year and a half, and most of those were done through mergers.

(Hat Tip: Mike Talbert.)

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