User:Britishfinance/sandbox
From Wikipedia, the free encyclopedia
A tax inversion is when a corporation restructures itself so that the current parent is replaced by a foreign parent, and the original parent company becomes a subsidiary of the foreign parent; thus moving its tax residence to the foreign country. Executives and operational headquarters often stay in the original country. In the US definition, it is required that the original shareholders remain a majority control of the post-inverted company.
The overwhelming majority of the less than 100 tax inversions recorded since 1993 have been of US corporations (85 inversions), seeking to reduce their exposure to the US corporate tax system. The only other jurisdiction to experience a material outflow of tax inversions was the United Kingdom from 2007–10 (22 inversions), however, UK inversions largely ceased post the reform of the UK corporate tax code from 2009–12.
The first inversion was McDermott International in 1983.[lower-alpha 1] Reforms by US Congress in 2004 halted "naked inversions", however, the size of individual "merger inversions" grew dramatically; in 2014 alone, they exceeded the cumulative value of all inversions since 1983. New Treasury rules in 2014–16 blocked several inversions, and the Tax Cuts and Jobs Act of 2017 (TCJA) reduced the incentives of inversions. As of March 2019[update], there have no further material US inversions.
As of March 2019[update] the most popular destination in history for US corporate tax inversions is Ireland (with 22 inversions); Ireland was also the most popular destination for UK inversions. The largest completed corporate tax inversion in history was the US$48 billion merger of Medtronic with Covidien plc in Ireland in 2015 (the vast majority of their merged revenues is from the US). The largest aborted tax inversion was the US$160 billion merger of Pfizer with Allergan in Ireland in 2016. The largest hybrid-intellectual property (IP) inversion, was the circa. US$300 billion acquisition of Apple Inc.'s IP by Apple Ireland in 2015.