Tradelines News

Get the latest news and updates on cross-border customs and international trade.

U.S. Changes Tax Code to Keep Companies from Moving Offshore

Posted September 25, 2014

Under Economic Issues, International Trade Issues

(IndustryWeek – AFP)

The U.S. Treasury took action Monday to halt a rising torrent of U.S. companies moving offshore to cut their tax bills, saying the surge in so-called inversions threatened government income.

The move to close loopholes that encourage companies to merge with a foreign firm and relocate their tax residences offshore could stifle takeovers announced this year worth hundreds of billions of dollars.

Those include several high-profile medical industry deals, including AbbVie’s $55 billion purchase of Shire and Medtronic’s $43 billion merger with Covidien, as well as Burger King’s$11 billion tie-up with Tim Hortons, and Chiquita Banana’s proposed $1 billion merger with rival Fyffes. Read more here.