Originally posted on $treet-¢ents:
Clever nick names and acronyms often catch hold. While never certain of the source (many proclaim authorship) a recent “Cool” tag/nick name has garnered much attention. After this quick post, at your next cocktail party or other gathering, you can toss this one out with confidence.
The world is a much smaller place today. Companies are free to merge and purge globally, and they do frequently. More importantly, tax rates are different in different parts of the world, just as they are in different states in the USA.
- Merging or buying a publicly traded TAX PAYING company in a different country
- Possible relocation of the companies domicile to said country
- Lower tax rate/base of the newly acquired company
These are the keys to a Tax Inversion.
Bottom Line: Buy or merge with a company that resides in a country with a lower tax rate than your current…
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