April 5, 2016 11:42 AM | Permalink |
For Immediate Release: Tuesday, April 5, 2016
Contact: Jenice R. Robinson, 202.299.1066 X29, Jenice@ctj.org
New Treasury Regulations Are Critical, But Not Sufficient to Stop Inversions
Following is a statement by Robert S. McIntyre, director of Citizens for Tax Justice, regarding the Treasury Department’s proposed new regulations to curb tax avoidance by U.S. corporations that pretend to become foreign companies for tax purposes.
“There is growing public outrage over lax tax laws that allow American corporations to avoid paying U.S. taxes by claiming foreign citizenship. These new regulations partly address that by reducing the tax payoff from a convoluted transaction known as “earnings stripping.” While the regulations may not stop the pending Pfizer inversion, they may put a damper on the company’s assumed plans to avoid taxes on $40 billion in untaxed profits that it has shifted into tax havens.
“But the Treasury Department can and should take further action. For example, it should use its authority to further limit the ability of expatriating companies to use “hopscotch loans” to get around the current, weak curbs on inversions.
“Even if Treasury further cracks down on U.S. companies that claim foreign residency for tax purposes, congressional action remains necessary to put a full stop to corporation inversions. Congressional leaders should stop coddling corporate deserters and enact anti-inversion reforms such as the Stop Corporate Inversions Act.”