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Obama proposal fails to squash appeal of inversions

By Neasa MacErlean

24 September 2014 at 07:07 BST

US companies wanting to move their HQs abroad could still find this kind of tax-efficient 'inversion' technique attractive despite White House proposals designed to curb the trend.

White House proposals to curb tax inversions may not deter US companies AR Pictures

Some of the larger, tax-specialist law firms in Europe - including Slaughter and May and Arthur Cox - have been active in advising companies on inversion. But the new proposals from President Barack Obama would still let such corporates use cash earned outside the US on a tax-free basis. 

Opportunities unaffected

While experts predict some short-term disruption to deals as companies examine the details of the new laws, those experts expect the inversions business to be resumed largely as it was before. Bret Wells, law professor at the University of Houston, said: ‘They [the drafters of the proposals] are trying to deal with the legacy earnings and not with the prospective business. The companies consider global growth to be an increasingly important part of their businesses. As they rotate into more global growth, those opportunities will remain unaffected.’ Source: Financial Times


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