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 inversions as “unpatriotic”. The Treasury formulated rules to stamp out the practice.
That stemmed the flow of inversions for a while. Now a flurry of deals has put them back in the spotlight (see article). This month alone, Terex, a cranemaker, has announced a deal with Konecranes that will move its headquarters to Finland; and CF Industries, a fertiliser-maker, and Coca-Cola Enterprises, a bottler, have unveiled transactions in which they will redomicile in Britain. Policymakers are talking about making inversions even harder. The perverse consequence would be to make it more likely that taxes and jobs will leave America.
The boardroom case for inversions stems from America’s tax exceptionalism....
from The Economist: Leaders http://ift.tt/1JeTdf7
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