After months of anticipation, the US Department of Treasury issued new rules about so-called tax inversions that raised uncertainty about the $160 billion merger deal between Pfizer and Allergan.
The rules are designed to curb inversions, which effectively reduce federal revenue and, as a result, have been widely criticized as unpatriotic and detrimental. In these deals, a US company buys a foreign company and reincorporates headquarters overseas where corporate taxes are lower. The acquiring company can reduce taxes by adding debt to its US unit and shifting profits overseas.
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