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May 27. 2014

ACT Releases Report on Recent U.S. Corporate Redomiciliations and the Growing Need for Tax Reform

By ACT Staff

ACT has released a new report in response to the recent trend of U.S. companies pursuing redomiciliation through mergers with overseas companies. The report describes the recent trend of corporate inversions through mergers, the parts of the U.S. tax code that are encouraging these mergers, as well as the economic and tax effects of these transactions. Additionally, the report looks at how the U.K. dealt with this issue in the past – and what it means for U.S. corporate tax reform efforts today. Speaking at a briefing with reporters earlier this month, ACT economic advisor Dr. Laura D. Tyson said:

“…there has been a recent wave of cross-border mergers where the U.S. company is larger, but the merged entity has chosen to establish tax headquarters in a foreign jurisdiction. When I look at those facts, I conclude very quickly, as do most observers of what is going on, that this is a clear indication that the U.S. corporate tax system is increasingly no longer competitive, that it increasingly makes the U.S. not an attractive location to incorporate a new business.”

Download the full report here.