The Caribbean has just 18 congressional working days from Sunday September 20 to try to have the US Congress or the District of Colombia address an act naming 17 Caribbean nations as “tax havens”. If passed without amendment it could have the effect of reputationally damaging the countries concerned with… – Continue reading
The largest producer of nitrogen-based fertilizer in the United States, CF Industries, is considering merging with a Dutch competitor and moving its headquarters overseas to avoid the “double taxation” of profits earned by overseas subsidiaries going to the domestic company. Curtis Dubay, a tax and economic research fellow with The… – Continue reading
Seven leading Democrat lawmakers wrote a letter on September 12 to US Treasury Secretary Jack Lew urging him to publish an annual list of companies that have undertaken corporate tax inversions, and to use the Administration’s executive authority further to discourage the use of inversion techniques. Tax inversion techniques are… – Continue reading
Democratic lawmakers urged the Obama administration to take a more aggressive stance toward the offshore tax deals known as inversions. Seven congressional Democrats in all called on Treasury Secretary Jack Lew to take executive action against a technique known as earnings stripping that makes the offshore deals more attractive. They… – Continue reading
The Treasury Department has pushed American-based corporations to lobby against a tax provision prized by their foreign counterparts, according to people who have heard the pitch. One senior Treasury official in particular, Danielle Rolfes, urged domestic companies to more aggressively target an incentive for interest expensing during a March tax… – Continue reading
The value of merger and acquisition (M&A) activity with Irish involvement so far this year has surged to almost €100bn – nearly twice the figure at the same time last year. And Irish law firms Arthur Cox and A&L Goodbody continue to rank among the top firms advising on the… – Continue reading
Monsanto has reported that it has ended its attempt to merge with Syngenta after its latest $46.2 Billion offer was rejected This ends Monsanto’s four-month pursuit of Syngenta and its hopes of a deal that would have formed a global agriculture powerhouse by combining Monsanto’s lead in global seed enterprise… – Continue reading
IT IS the corporate equivalent of burning the American flag. A “tax inversion” is a manoeuvre in which a (usually American) firm acquires or merges with a foreign rival, then shifts its domicile abroad to reap tax benefits. A spate of such deals last year led Barack Obama to brand… – Continue reading
Introduction In 1934 distinguished US jurist Judge Learned Hand famously opined that “one may so arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to… – Continue reading
Yet another American company has announced its intention to carry out a corporate inversion, a fancy term for buying a smaller company, completing some paper work and, for tax purposes, declaring its new headquarters are in a foreign nation. This time it’s Terex, a Connecticut-based heavy equipment and crane manufacturer,… – Continue reading
On July 29, 2015, Charles Boustany (R-LA) and Richard Neal (D-MA) released a bipartisan discussion draft of proposed Internal Revenue Code (the “Code”) amendments that would cut the United States income tax rate on corporate profits generated from patents and certain other intellectual property to approximately 10% (the “Tax Rate… – Continue reading
Shire, the giant pharmaceutical company that relocated its head office from the UK to Ireland for tax reasons a number of years ago has surprised investors by launching a US$30bn hostile bid to acquire the American company, Baxalta, which is also involved in the manufacture of drugs to combat rare… – Continue reading
On May 20, 2015, the U.S. Treasury Department (“Treasury”) released five sets of proposed revisions to the U.S. Model Income Tax Convention (“Model Treaty”) for public comment. The Model Treaty was last updated in 2006. The purpose of the proposed revisions is to ensure that the United States maintains the… – Continue reading
This article is the third in our current three part series discussing various impacts of the Organisation for Economic Co-operation and Development’s (OECD’s) efforts to address the perceived global tax problem of base erosion and profit shifting (BEPS). The first article provided an overview of the key aspects of the… – Continue reading
While preparing its bid for Tim Hortons Inc. last year, Burger King Worldwide Inc. initially wanted to set up the new parent company of Canada’s iconic supplier of double-doubles and maple-glazed doughnuts across the Atlantic in Britain, to avoid taxes. Miami-based Burger King’s first offer to buy the doughnut chain… – Continue reading
Tax savings drove the acquisition strategy of Valeant Pharmaceuticals International Inc. and led to Burger King’s move to Canada, according to a U.S. Senate committee report. Taxes appear to be much more important to the deals than the companies say, according to an advance copy of the report and testimony… – Continue reading
Blaming foreigners for homegrown economic woes is a tradition of sorts in Washington. In recent years, the favored scapegoat has been China and its folkloric trade indiscretions. But, lately, some have taken to demonizing foreign companies for the sins of a broken U.S. corporate tax system. Given the importance of… – Continue reading
A U.S. Senate investigative subcommittee, which has used its power for more than a decade to scrutinize corporations and financial institutions for wrongdoing, is shifting its focus to keeping tabs on the government. The U.S. Senate Permanent Subcommittee on Investigations is slated to hold its first hearing under new leadership… – Continue reading
Why stop at $221 billion? Drug companies are entering another round of dealmaking, after plowing past the global record. Teva Pharmaceutical Industries Ltd.’s $40.5 billion agreement Monday to purchase Allergan Plc’s generic-medicines business puts the mechanism in place to trigger more takeovers. For starters, the remaining Allergan company — with… – Continue reading
Thwarted in its attempt to acquire the generic and specialty pharmaceuticals company Mylan, the Israeli–based Teva will purchase Ireland-based Allergan Generics for $40.5 billion in an acquisition that executive and investors at both companies — if not consumers — are applauding. “Teva’s deal with Allergan will create a market behemoth… – Continue reading
Pharmaceutical industry acquisition target Perrigo (PRGO) Wednesday said it’s buying German pharmacy company Naturwohl Pharma GMbH, the latest transaction in the sector’s surge of mergers and acquisitions. Perrigo, operated from Michigan but headquartered in Dublin following a corporate tax inversion, did not disclose terms of the deal for Naturwohl and… – Continue reading
Hopes for a broad overhaul of the corporate tax system are fading as the 2016 elections draw closer, but momentum is building for one key change — the U.S. tax that companies would pay on overseas profits. A bipartisan proposal, to be introduced soon in Congress, would tax the estimated… – Continue reading
Ireland’s Horizon Pharma has launched a hostile takeover bid for Depomed of the US after being frustrated in its efforts to enter negotiations about combining the two companies. Horizon was a US company until September 2014 when it closed a $660m takeover of Irish company Vidara Therapeutics just days before… – Continue reading
“American” corporations that “invert,” or establish offshore domiciles in order to avoid payment of U.S. taxes, are still feeding at the government trough. They have benefited from American laws, courts and infrastructure, becoming obscenely wealthy – yet refuse to return the favor to We The People. And who and what… – Continue reading
A corporate tax reform coalition blasted President Obama’s international tax proposals on Tuesday, saying they would accelerate the sort of offshore maneuvers that Democrats want to eliminate. The Alliance for Competitive Taxation said that the White House’s proposal to impose a minimum tax on multinational corporations’ foreign earnings would only… – Continue reading
U.S. lawmakers are exploring a new corporate tax break that would benefit companies already adept at avoiding taxes. The idea — known as a patent box or innovation box — would impose a lower tax rate on income generated from patents and other intellectual property housed in the U.S. This… – Continue reading
Last year at this time, more than a dozen U.S.-based corporations were threatening to move their legal residence to foreign tax havens in a paper transaction known as an inversion. Facing a wave of public opposition, some corporations abandoned these inversion attempts—notably, drugstore chain Walgreens put its plans on ice,… – Continue reading
It’s the $2 trillion question. That’s roughly how much U.S. multinational corporations have stashed offshore — money that both Republicans and Democrats would like to tap for revenue and cash that even some companies wouldn’t mind paying a reduced tax rate on. Democrats and some Republicans are interested in using… – Continue reading
The United States has been criticized on more than one occasion for failing to be a meaningful participant in the OECD’s multi-pronged initiative to address base erosion and profit shifting (BEPS). Some commentators have even gone so far as to accuse the United States of actively working against the BEPS… – Continue reading
The reported resurgence of cross-border mergers involving US companies that then move their corporate headquarters abroad shows that anti-tax avoidance measures passed last year were “a sticking plaster rather than a long-term solution”, an expert has said17 Jun 2015 The Financial Times reported (registration required) that demand for corporate ‘inversion’… – Continue reading
The U.S. Model Income Tax Treaty (the U.S. Model Treaty) generally represents the United States’ opening position in treaty negotiations. As a result, when changes to the treaty are proposed, international tax practitioners should be aware of the potential impact those changes can have on their existing inbound U.S. structures…. – Continue reading
US companies have regained their appetite for controversial foreign takeovers that allow them to move overseas and escape US taxes, in spite of a White House crackdown to restrict so-called tax inversions last year, reports the Financial Times. According to several senior corporate advisers in the US and Europe, demand… – Continue reading
In a year when technology deals are set to break records, U.K. targets are proving popular. About $20 billion of deals were struck for British technology companies in the last 12 months, almost double the amount spent a year earlier. U.S. buyers accounted for about half the acquisitions. They included… – Continue reading
Shire is considering a move to acquire Swiss biopharma company Actelion in a move that would boost its rare disease portfolio. According to a report in the Sunday Times, Shire made an informal approach to Actelion about a possible £12.4bn takeover several weeks ago, but the opening bid was turned… – Continue reading
U.S. agricultural and crop chemicals giant Monsanto (MON) could shift its headquarters to Europe in a tax-savings strategy if the company succeeds in its $45 billion unsolicited bid to merge with rival Swiss rival Syngenta. Details of the tentative plan came Monday as Syngenta reiterated its opposition to the transaction,… – Continue reading
Medtronic is on the lookout for early-stage technologies developed by medical device firms in the United States, as well as larger acquisitions that can help the company implement a three-pronged strategy, in the wake of its $43 billion merger with Covidien. The tax inversion deal allowed Medtronic to relocate to… – Continue reading
Law360, New York (June 3, 2015, 3:24 PM ET) — Final rules released Wednesday by the Internal Revenue Service meant to deter corporate inversions retain a strict bright-line rule that subjects an inverted company to sanctions if it does not have a substantial business presence in a foreign country, despite… – Continue reading
Avago Technologies Ltd.’s pending takeover of Broadcom Corp. taps an arcane tax structure that has being dusted off amid a rise in cross-border mergers. Avago said it is prepared to offer Broadcom shareholders special partnership units that would defer any taxes triggered by the $37 billion tie-up, which was announced… – Continue reading
The executive chairman of Walgreens Boots Alliance said the Deerfield-based drugstore chain was made a “whipping boy” by the Obama administration and elected officials opposed to corporate tax inversions. “The Obama administration and (Treasury Secretary Jack Lew) were taking the opportunity to select any company that was even thinking about… – Continue reading
On May 20, 2015, the US Department of the Treasury released for public comment draft updates to the US Model Income Tax Convention, including provisions to deny treaty benefits to companies that change their tax residence via inversion transactions. The Treasury said other changes are intended to ensure that the… – Continue reading
Big pharma’s poison pill The tax commissioner wants a senate inquiry to examine tax minimisation by multinational drug companies. Analysis with Heath Aston. Pharmaceutical companies will be put under the microscope by the Senate tax avoidance inquiry which recently exposed rampant “offshoring” of profits by Google, Apple and Microsoft. Tax… – Continue reading
The Treasury Department announced draft changes for the U.S. Model Income Tax Treaty — the baseline text used by the Treasury Department when it negotiates tax treaties. The current U.S. Model was last updated in 2006. The proposed changes in the draft provisions are intended to combat so-called Base Erosion… – Continue reading
Canada’s health-care stocks are sizzling, as Concordia Healthcare Corp. and Valeant Pharmaceuticals International Inc.’s buy-and-streamline strategy has pushed the industry’s earnings and margins ahead of U.S. peers. The drugmakers are the two top-performing stocks in the Canadian equity benchmark this year, boosting total returns for the members of the Standard… – Continue reading
Authorities worldwide have increased scrutiny of tax-avoidance strategies in the past year, CFOs and finance directors of multinational clients told global tax consulting firm network Taxand. Sixty per cent of multinationals reported an increase in audits by tax authorities in the past year, and 70% said authorities had increased their… – Continue reading
In July 1997, Tyco International (with then Wall St darling Dennis Kozlowski at the helm) was “acquired” by a relatively small provider of home security services, known as ADT Inc. The deal arguably exploited some strategic synergies between the two companies, but far and away the biggest benefit to Tyco… – Continue reading
The corporate community is increasingly sounding the warning to Congress: Europe is coming after us on taxes. With tax reform talks stumbling in Washington, the fear for corporate titans is that other countries are already implementing a global set of recommendations meant to crack down on offshore tax avoidance. Lobbyists… – Continue reading
(Bloomberg) — Monsanto Co.’s potential acquisition of rival agricultural-chemical maker Syngenta AG could be structured as a tax inversion under current U.S. rules despite political resistance to such deals, according to an analysis by Bloomberg Intelligence. Switzerland’s Syngenta last week rejected St. Louis-based Monsanto’s $45 billion takeover offer. Monsanto, the… – Continue reading
Lexmark International Inc. considered moving its headquarters overseas to save money on taxes earlier this year, according to chief financial officer David Reeder. But the printing company decided to stay in its Lexington, Ky. home, after spending the bulk of its offshore cash to buy software developer Kofax Ltd.s
Corporations that have reclassified themselves as “foreign-owned” received approximately $1 billion in federal contracts over the last five years. These companies profit from American tax dollars despite avoiding U.S. taxes themselves. That could soon change. Two members of Congress have reintroduced legislation that would block these companies from winning lucrative… – Continue reading
The Senate’s No. 2 Democrat is warning a major U.S. agriculture company to think twice about moving its legal address offshore. Minority Whip Dick Durbin (Ill.) told Monsanto that it’s in the company’s best interest to remain headquartered in the U.S., and noted that the company has had no problems… – Continue reading
