The Pfizer move is called an inversion, in which an American company is able to incorporate abroad by acquiring a foreign company. The buyer, in effect, becomes a subsidiary of a foreign parent — even though American shareholders own most of the merged company and the company’s headquarters and top executives stay in the United States. Incorporating in one country and being based in another creates opportunities to play the tax laws of one nation off against another’s; conceivably, profits might not be taxed in any country. Some 25 companies have used inversions since 2008.
Posted on: Sat, 24 May 2014 10:08:25 +0000
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