Treasury Toughens Rules for Firms to Move to Low-Tax Nations
Source: Wall Street Journal
The Treasury Department issued new rules making it harder for U.S. companies to move to low-tax countries, amid a rising debate over U.S. business-tax policy.
The move Thursday comes just days after Cleveland-based Eaton Corp. announced plans to relocate to Ireland, through a deal to acquire Ireland-based Cooper Industries PLC. The Eaton-Cooper deal represents the latest in a series of similar relocations that some tax experts expect to see increase in number.
The new rules make it tougher for many U.S. companies to relocate to low-tax countries through merger by requiring the combined firms to have 25% of employees, property and gross income in the new home country. If firms don't meet these requirements, they face substantial tax penalties. The previous rules required substantial business activity in the new home country, a fuzzier standard.
The Treasury move to toughen the rules had been anticipated, because the old rules were scheduled to expire Friday. Several tax experts said it doesn't appear the Eaton move would be adversely affected by the new regulations, however, in part because the rules contain a grandfather clause allowing deals that already have been announced to proceed under existing rules.
Read more: http://online.wsj.com/article/SB10001424052702303753904577453120752153042.html
Google the title for full article.
Rosa Luxemburg
(28,627 posts)dkf
(37,305 posts)Sigh.
PossumSqueezins
(184 posts)No matter where your corporation resides, if over 50% of assets are owned by Americans or if over 50% of profits go to Americans, then YOU PAY AMERICAN CORPORATE TAXES. THE END.
The mass exodus would be pointless. They would have to just stay and look for new loopholes.
leveymg
(36,418 posts)and refunded to the consumer. Those companies that that don't pay US corporate tax or refuse to enter into a tax agreement with the U.S. don't have the tax refund allowance. Let the market decide whose products we want to buy.