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.