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Eversheds comment: US tax inversion changes fail to tackle underlying issues

  • United Kingdom
  • USA

    23-09-2014

    Commenting on moves by the US government to make it harder for companies to use foreign mergers to reduce their US tax bills, Ben Jones, partner and tax expert at law firm Eversheds, says:

    “The perceived US tax benefits of the recent series of high profile corporate mergers involving US corporations have received significant scrutiny in recent months and it was inevitable that the US Government would react to protect its tax base. The proposed US tax changes target many of the tax benefits associated with what is known as “corporate inversion”, but do not address the underlying problem – the high US corporate tax rate and extra-territorial scope of the US tax system.

    "The US approach to corporate tax is increasingly out of step with the rest of the world and prejudicial to US-based multinational companies. Until these fundamental issues with the US corporate tax system are resolved, the incentives will remain for US-based corporations to structure their affairs to reduce the detrimental impact of the US tax system.”

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