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Tax 'inversions' - Treasury moves to close 'loopholes': corporations move headquarters over seas to avoid taxes

OWoN: Now they are panicking because even their major corporations are leaving. They think they can tax and take at will.

Once the dollar crashes watch how fast those of ability leave, and see how far feeding and funding the State gets them then. There is no room for a nation of people and the Cabal to co exist. One has to die, but the choice is not looking good. 

Those who create will not see it all taken by the State. Damned right they move domicile.


Treasury Secretary Jack Lew speaks during a forum at the Brookings Institution's Hamilton Project Monday in Washington, D.C. - Image: Mark Wilson, Getty Images


Treasury cracks down on corporate tax 'inversions'


USA Today
By Gregory Korte
22 September 2014

Washington — The Treasury Department will crack down on so-called tax "inversions," targeting companies that try to avoid taxes by moving their headquarters overseas.

Treasury Secretary Jacob Lew said the new rules would help close what he called a "glaring loophole in the U.S. tax code" in which U.S. companies acquire foreign businesses and then switch their citizenship to avoid paying U.S. taxes.

One rule, for example, would make it more difficult for a smaller foreign company to take over a larger U.S. company, strengthening a requirement that the American-owned company own less than 80% of the new, foreign company. When the former American parent is more than 60% but less than 80% of the new company — as most recent inversion deals have been — the merger would be allowed but with significant tax consequences.

Another rule would target so-called "hopscotch" loans, in which companies get around taxes on dividends by instead distributing their earnings in the form of a loan to the foreign company. Those would now be taxable in the United States.

The Treasury Department is still fleshing out the details on the new guidance, but it is putting companies on notice that deals that close on or after Monday's announcement will be subject to the new tax rules.

"For some companies considering deals, today's actions may mean that those transactions no longer make economic sense," Lew said. He said more actions could be on the way.

Lew said the Treasury Department was also careful to target cases where the mergers were primarily for tax avoidance. "Genuine cross-border mergers make the U.S. economy stronger by enabling U.S. companies to invest overseas and encouraging foreign investment to flow into the United States," he said.

Inversions aren't a new problem, but a number of high-profile deals have rekindled interest in addressing the issue. Burger King is in talks to be acquired by Canadian company Tim Hortons, and an outcry over a similar plan by drugstore chain Walgreens caused that company to abandon its inversion plans.

One prominent Republican said the rules show the Obama administration "is only interested in doing the bare minimum — just enough to say they care."

"We've been down this rabbit hole before, and until the White House gets serious about tax reform, we are going to keep losing good companies and jobs to countries that have or are actively reforming their tax laws," said House Ways and Means Committee Chairman Dave Camp, R-Mich.

White House Press Secretary Josh Earnest said Monday the Obama administration would prefer to have Congress deal with the issue as part of a larger reform of corporate taxes. One reason: The administration can only make the rules apply to future deals.

"We would like to see Congress pass a measure that would be retroactive to ensure that companies who are trying to game the system and beat Congress to the punchline here are not able to do so — or at least, they're not able to benefit from it," Earnest said.

Senate Finance Committee Chairman Ron Wyden, D-Ore., is working on a bipartisan bill that would block inversions retroactive to May 8. The bipartisan Joint Committee on Taxation says that proposal would raise revenues by $19 billion over 10 years.

Wyden said the Treasury announcement "reinforces the urgency for action before this growing wave of inversions erodes our nation's tax base." He said he hopes Congress can act in the "lame-duck" session after the Nov. 4 election.

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3 comments :

  1. This move is promising, especially where the criminal element needs to be reigned in. I would think since Corporations are considered "people" then they should renounce their citizenship (Corporate Charter) in US and incorporate in the country where they will do business. This method will yield more oversight for the country where the business is transferring to.

    Many foreign countries do not have the same requirements regarding environmental degradation, and US regulations can be exploited for profit in foreign countries. It is often difficult for foreign governments to track down perpetrators who are tied to US while having the benefits of tax evasion and bigger profits. Where the US miss out is the additional tax income which should legally be paid to US. And the US regulators are burdened with the complaints of companies who environmentally degrade land and air leaving devastation for these countries to clean up.

    Great...close the loopholes...bring the jobs back to America or else they are expelled and must legally transfer the business to the country where they choose to do business.

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  2. Like the article and agree with you Fedup. These major companies have worked very hard to squeeze every penny out of the people of this nation and not pay taxes on it. Many have shifted their jobs out of the country and pay much less where they go and still don't pay taxes. It's a vicious cycle that has sucked the life out of this country and the evidence is everywhere you look. Will be glad when Mr. Wanta and others set things in motion here in the US and get the many seeking jobs working again. Our country needs more than a facelift, it needs revitalization.

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    Replies
    1. Absolutely P...the thing about it is that the corporations are umbrella corporations under the Company Store where these tax evaders are basically the 1%. So they get a pass, it's an illusion for us to think that the "devil" will divide himself...this is more rhetoric to convince us that our government is playing fair, after they bankrupted the country and moved all the jobs overseas. They cannot make me believe that anything will change...they are always vying for more time to implement their plans...they don't realize that their Agenda 21, Global 2000 plan is not going to work...it's people like us who refuse to accept their lies...this builds resistance in their plan because we are aware.

      I agree, this country does need total revitalization.

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