Limits on overseas mergers prompt renewed debate

http://hosted.ap.org/dynamic/stories/U/US_OVERSEAS_TAX_BREAKS?SITE=VANOV&SECTION=BUSINESS&TEMPLATE=DEFAULT

Limits on overseas mergers prompt renewed debate
By JOSH LEDERMAN and JIM KUHNHENN
Associated Press
Sep 23, 7:59 AM EDT

WASHINGTON (AP) -- The Obama administration's decision to curb the ability of U.S. corporations to skirt taxes by merging with foreign companies kicked off an immediate election-season debate over when and how to tackle the nation's complex corporate tax code.

Following through on a populist appeal from President Barack Obama for a new era of "corporate patriotism," the Treasury Department stepped in Monday with new regulations designed to limit the ability of U.S. firms to seek refuge in lower tax countries.

The Treasury will make these so-called corporate inversions less lucrative by barring creative techniques that companies use to lower their tax bill. Additionally, the U.S. will make it harder for companies to move overseas in the first place by tightening the ownership requirements they must meet.

"This action will significantly diminish the ability of inverted companies to escape U.S. taxation," Treasury Secretary Jacob Lew said. He added that for some companies considering inversions, the new measures would mean inverting would "no longer make economic sense."