New Inversion Regs End Pfizer-Allergan Deal, But Could Election-Year Proposals Include Inversion Legislation?

Posted on 05-06-2016 by
Tags: Lexis Advance Tax , LIT , Corporate Inversions , taxes , Latest Headlines & Stories , trending news , cybersecurity , Securities

 The issuance of the new inversion regulations resulted in the end of the proposed Pfizer-Allergan deal and was another major step by the Treasury and Internal Revenue Service to curb inversions. However, in the press conference announcing the new regulations, Treasury Secretary Lew continued his call for Congress to pass legislation to stop inversions and also released an updated report on the Obama administration’s framework for comprehensive business tax reform. [“Remarks by Treasury Secretary Jacob J. Lew on a Press Conference Call Regarding Announcement on Corporate Tax Inversions”, https://www.treasury.gov/press-center/press-releases/Pages/jl0406.aspx (April 4, 2016)]. 

Now that the presumptive Republican and Democratic nominees have been identified, the question arises whether their tax reform packages could include anti-inversion legislation. Will the populist appeal of Senator Sanders’ anti-big business message, coupled with Secretary Clinton’s general strategy to align with the Obama administration, lead Secretary Clinton to continue the President’s economic and tax policies and include anti-inversion legislation in a tax reform package? Much of the appeal of the presumptive GOP nominee’s presidential bid is based upon his pledge to bring business and industry back to America, so could a Trump tax reform package include anti-inversion legislation, or would Trump continue to repeat the common Republican refrain to lower the U.S. corporate tax rate instead?

Whatever the outcome in November, actual, proposed legislation rarely resembles election-year promises, but the question of potential anti-inversion legislation as part of the candidates’ economic programs is an interesting one. Until that time, below is a brief review of what is definitely certain about the current state of anti-inversion policy – the new regulations.

Download the full PDF, “Treasury and IRS Continue Action Against Corporate Inversions: Here’s What the New Regulations Mean” for deeper insights into the new laws’ implications.

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