Pfizer Seeking Inversions Shows Companies Unfazed by Lew
By Richard Rubin, Manuel Baigorri and Ruth David Sep 24, 2014
Pfizer Inc. has approached Actavis Plc about a deal that could allow the U.S. drugmaker to move its address overseas and reduce taxes, in a sign the Obama administration’s efforts to curtail inversions might fall short.
Pfizer made its approach before the U.S. Treasury Department announced new rules Sept. 22 to make such deals -- called tax inversions -- more difficult, people with knowledge of the matter said. Those changes won’t deter Pfizer, even if they are a complication, one of the people said, asking not to be identified discussing private information.
Another high-profile inversion deal, Burger King Worldwide Inc.’s purchase of Tim Hortons Inc., will proceed, the Canadian company said after the rule changes were revealed.
While Treasury Secretary Jacob J. Lew could take further steps, he steered clear of putting an end to a key benefit of inversions, which allow companies to lower their U.S. earnings by shifting profits overseas using a technique known as earnings stripping.
“The ability to shelter future foreign earnings from U.S. tax seems to be a principal objective and, as far as I can see, that benefit remains,” said Robert Willens, a corporate tax consultant in New York.
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http://www.bloomberg.com/news/2014-09-24/pfizer-pursuing-inversions-shows-companies-undeterred-by-lew.html
