- Treasury Releases New Rules on Inversions
- April 18, 2016
- Law Firm: McDonald Hopkins LLC - Cleveland Office
After the release of documents, called the Panama Papers, which revealed secret tax evasion, money laundering and evasion of sanctions violations by several high profile individuals worldwide, President Obama’s Treasury Department issued new rules aimed at cracking down on corporate tax inversions.
"We've had another reminder in this big dump of data coming out of Panama that tax avoidance is a big, global problem. It’s not unique to other countries," Obama said. "A lot of it is legal, but that’s exactly the problem. It’s not that they’re breaking the laws, it’s that the laws are so poorly designed."
While Obama praised the new rules by Treasury, he said that it is not enough and that only Congress can enact the kind of changes necessary to prevent what he calls “gaming the system.”
The new rules, released on Monday by the Treasury Department, restrict inversions and are specifically aimed at what the administration has called “serial inverters.”
The new rule creates a three-year window during which a foreign company would not be allowed to count newly acquired companies toward its foreign ownership percentage.