IndiaCorpLaw

Restrictions on Tax Inversions

A few months ago, we had discussed
the use of “inversion” deals by U.S. companies to minimize the effect of U.S.
taxes. Since then, inversions have been the subject matter of intense debate
from a policy perspective. Two potential regulatory responses have been proffered.
One is more short-term by which the U.S. government limits the ability of
companies to carry out inversion deals by either prohibiting or restricting
them. The other is more long-term and requires an overhaul of the U.S. corporate
tax structure and system.

Earlier this week, the U.S.
Treasury adopted the first response and introduced
significant curbs
on the ability of U.S. companies to carry out inversions.
For an analysis of the impact of this announcement, please see here
and here.