New U.S. Treasury Department rules designed to make corporate tax inversions more difficult will impact M&A activity to a certain extent, but the Association for Financial Professionals believes there is a different motive to the move—namely, an effort to force the hand of Congress, which has been reluctant to address the issue of corporate inversions through legislation.
The rising number of corporate inversions is inseparable from the issue of corporate tax reform. AFP has long maintained that higher corporate taxes hurt the competitiveness of American businesses doing business abroad and that the focus should be on permanently reforming the tax code. Currently, the United States maintains the highest statutory corporate tax rate in the OECD and is one of the only developed nations to tax profits earned overseas.
AFP will continue to monitor the effects of the rules announced this week. AFP will also diligently track Congress’s actions on this front in the coming months. Where appropriate, we will submit comment or testimony on any regulation or legislation that impacts treasury and finance professionals.
Learn more about tax and regulatory issues affecting the treasury and finance professions at the 2014 AFP Annual Conference. To make your voice heard, get involved with AFP PAC or contact Mary Ellen Saunders, AFP’s director of government relations, at email@example.com.