U.S. Chamber Sues So American Firms Can Move Overseas And Dodge Taxes
Source: Washington Post
The U.S. Chamber of Commerce on Thursday sued to block the implementation of Obama administration rules that make it more difficult for U.S. companies to move their headquarters overseas to lower their tax bills.
The lawsuit, filed in U.S. District Court for the Western District of Texas, is a last-ditch effort by the business community to squash proposed regulations that have already scuttled plans by Pfizer to merge with Botox-maker Allergen in an $160 billion deal and become an Irish company. The merger would have saved the pharmaceutical giant at least $35 billion in taxes, according to advocacy groups.
The regulations issued by the Treasury Department in April took surgical aim at some of the chief benefits of a so-called inversion, in which U.S. companies are technically purchased by smaller foreign firms and then move their headquarters to a low-tax country in order to reduce their U.S. levy. The new rules made it more difficult, for example, for companies to use a practice known as "earnings stripping" that enables companies to lower their taxable U.S. profits.
But in its suit, the U.S. Chamber and the Texas Association of Business say the Obama administration rules went too far.
Read more: https://www.washingtonpost.com/news/wonk/wp/2016/08/04/business-groups-are-suing-over-rules-to-stop-tax-dodging-mergers/
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