Presenters:
Corporate inversion is defined as an international corporation reincorporating in a different country, changing from a U.S. corporation to an offshore jurisdiction that is usually a tax haven and therefore potentially reducing tax liability. U.S. Corporations have availed themselves to the policy and have reaped the rewards of lower tax jurisdictions. However, these tax inversions can be complex and are currently politically controversial. We will discuss the benefits of employing corporate tax inversions, including potential benefits for future shareholders and generating shareholder value, proposed legislation affecting corporate inversions (i.e., the Stop Corporate Inversions Act of 2014), and retroactive implications of tax reform.
I. How Inversions can occur:
a. stock transactions,
b. an asset transaction,
c. drop down transaction combining the two.
II. History of Inversions and the Laws Enacted to Curb Abusive Transactions
a. 1980s - corporate inversions begin as an obscure transaction but gain popularity (Several Fortune 500 companies take advantage of lower tax jurisdictions and increased shareholder value)
• 1983: The McDermott Transaction and Sections 1248(i) and 163(j)
• 1994: The Helen of Troy Transaction and Section 367(a) regulations,
• Late 90s - 2000s and section 7874:
o Sixty Percent Inversions,
o Eighty Percent Inversions,
o Substantial Business Activities and Congressional Intent:
• Interpretation of Substantial Business Activities,
• 2012 Temporary Regulations: The removal of the facts and circumstances test
b. Proposed Legislation:
• Stop Corporate Inversions Act of 2014 & Supporters,
• Retroactivity of legislation and effects.
III. Advising Shareholders:
a. Subpart F and CFC regulations affect domestic shareholders,
b. IRS reporting compliance,
c. Repatriating Funds
i. Loans
ii. Dividends
IV. Conclusion
If you intend to take a course for CLE credit, please make sure your state is listed in the "Accreditation" section to the upper right of the program description. Accreditation displayed is unique to the purchased program format (live conference, live webcast, on demand, podcast). Credit totals listed for live conferences are the maximum credits available. Credits issued will be based upon actual time in attendance. Credit totals for other formats are for complete programs. Partial credit is not available for any online or downloadable format.
West LegalEdcenter will not provide accreditation for states not listed.
This product is intended for individual use by the named purchaser. Group viewings for online programs may be arranged for five or more attorneys within the same organization prior to viewing by emailing west.wlec-sales@thomson.com.