Tax inversion is a highly American term that is used to refer to the permanent relocation of the headquarters of a company or corporation from a high to a low-tax country. This is often done while the corporation retains most if not all of its operations within the high-tax nation of origin. Tax inversion is a relatively new phenomenon. Though hard to pinpoint the first time it was used, tax inversion was first seen in the 1990s when corporations in the United States seeking to relocate to low-tax countries like Bermuda. This paper seeks to analyze recent developments in tax inversion.
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Having described tax inversions and recent developments pertaining to them, this paper is left to conclude that this trend is in fact unpatriotic. It denies the country corporate taxes in a bid to maximize profits. The United States Treasury Department is however looking into ways of ensuring that companies do not benefit through inversions.
How to Stop the Inversion Perversion. (2014). The Economist.
Tax Inversions; Inverse Logic. (2014). The Economist.
Treasury, U. D. (2014). Treasury Announces First Steps to Reduce Tax Benefits of Corporate Inversions. U.S Department of The Treasury.
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