Posted on

Treasury Department Takes Aim at Corporate Inversions

By:  Amanda Wilson

A few weeks ago, I posted about the increasing popularity of U.S. corporations moving their headquarters abroad, as illustrated most recently by the proposed Burger King/Tim Hortons merger. This type of transaction is referred to as a corporate inversion, which is a transaction in which a U.S. based multinational corporation restructures so that its U.S. parent is now owned by a foreign parent corporation (a Canadian corporation in the Burger King/Tim Hortons proposed acquisition). A corporate inversion has gained increasing popularity because of the high U.S. corporate tax rate and the desire to minimize U.S. taxes. For obvious reasons, the Obama administration does not like corporate inversions and wants to stop them. read more

Posted on

Foreign Operations? Should You Follow Burger King’s Example?

By:  Amanda Wilson

There has been a lot of publicity lately regarding Burger King’s proposed acquisition of Tim Hortons, as Burger King is expected to move its corporate headquarters to Canada following the acquisition.  These type of corporate inversions, where U.S. companies move their headquarters outside of the U.S., have been gaining momentum.  We have also seen large companies, such as Apple, benefiting from using foreign holding companies to protect income for their foreign operations from U.S. taxation.  Many politicans criticize these moves as unpatriotic.  However, they also offer corporate taxpayers the opportunity to benefit from lower corporate tax rates. read more