World Business NewsA round up of the latest news for those doing business internationally
US Business sees tax rate cut as solution to Inversions
Zone(s): USA ¦ Sector(s): Tax
Corporate inversions have been used by US companies when bidding for (generally smaller) foreign companies as a means of moving away from the high American 35 percent corporate tax rate. Under current law, a company that merges with an offshore counterpart can move its headquarters abroad (even though management and operations remain in the US), and thereby take advantage of lower taxes as long as at least 20 percent of its shares are held by the foreign company’s shareholders after the merger.