Monday, September 22, 2014

U.S. Acts to Curb Firms’ Moves Overseas to Avoid Taxes

By JULIE HIRSCHFELD DAVIS, NYT, SEPT. 22, 2014

WASHINGTON — Treasury Secretary Jacob J. Lew announced rules on Monday that are aimed at making it more difficult for American companies to lower their tax bills by relocating overseas and that would wipe out the benefits for those that do. It is the administration’s latest move to sidestep a paralyzed Congress and tackle a politically charged element of President Obama’s agenda.

“While there’s no substitute for congressional action, my administration will act wherever we can to protect the progress the American people have worked so hard to bring about,” Mr. Obama said in a statement after the regulations on the so-called corporate inversions were announced.

The changes will only affect deals that were completed starting Monday. But they could include pending inversion deals, like the one involving AbbVie, an Illinois-based pharmaceutical company that is in the process of acquiring its smaller British rival, Shire, or the Minneapolis medical device maker Medtronic, which is acquiring Covidien in Ireland.

(More here.)

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