U.S. legislators resume battle to limit corporate inversions
February 24, 2016
Two U.S. legislators introduced a bill Tuesday seeking to dissuade corporate inversions—the process of American businesses merging with companies overseas and relocating their headquarters in order to reduce stateside tax bills.
The bill would focus on earnings stripping, wherein companies take on debt from a parent company overseas, then deduct the interest payments on that debt from their U.S. earnings, paying less income tax as a result. It could curtail a stream of massive deals that are the result of major U.S. corporations seeking ways around the tax code.
Click here for more analysis and a list of notable corporate inversions of the past few years.