The Resource What is a corporate inversion?

What is a corporate inversion?

What is a corporate inversion?
What is a corporate inversion?
Although the complicated corporate inversion strategy is not new, it is increasing in popularity as a way to reduce tax rates on foreign earnings. The U.S. tax system is complicated, especially the sections that deal with international transactions. Recently, many U.S. multinational corporations have moved their headquarters to other countries in a transaction known as a "corporate inversion". The primary objective of a corporate inversion is to avoid the U.S.'s high tax rate on foreign earned income. Corporate inversions avoid this tax rate by causing foreign corporations owned by U.S. shareholders to earn income through a chain of corporations that does not include a U.S. corporation. This article discusses this very complicated strategy. It also provides an example of calculating a tax rate reduction by using a corporate inversion. Further, it scrutinizes the new corporate inversion regulations and Notice 2014-52, 2014-42 IRB 712
Citation source
In: Practical tax strategies. - New York. - Vol. 95 (2015),
  • Yang, J.G.S
  • Lauricella, L.J
Geographic coverage
North America
Language note
  • corporate inversion
  • CFC
  • penalties
What is a corporate inversion?

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