Corporate tax loophole is becoming more rampant, which caused U.S. lawmakers to carry on requesting for government action regarding the aversion of corporations from federal taxes.
According to the reports, the corporate tax loophole is represented by deals known as inversions. Inversions happen when the companies prevent federal taxes by switching to tax quarters found in other countries. Presently, nine deals of inversion have been traced, which include transactions of drugmaker AbbVie Inc. and Chiquita Brands International Inc. Though the inversion control is given limelight at this time, it was recorded that it already took place 32 years earlier.
The head of the U.S. Senate Finance Committee, Ron Wyden, encouraged the lawmakers to get rid of the inversion taking place in the country. He also assigned his panel to obtain statements from the inverted companies for the international tax law issues hearing. However, not even one company accepted the summons. Policy analysts also declared their view regarding the matter and projected the approval of anti-inversion law. Utah Senator Orrin Hatch, the top Republican of the finance committee, supported the anti-inversion law for he considers it the only solution to the loophole.
The approval of the anti-inversion law may likely be a complicated process. According to Hatch, the Congress may still take steps to address the corporate tax loophole only partially. Other than that, the senator does not agree with the Democrat’s recent proposal of bills. U.S. House of Representatives may not also act on inversions, particularly if the feat will not call for comprehensive tax reform. To bear on inversion control, U.S. Treasury Department’s senior official repeated the call for control over inversions in order to prevent it from becoming even more widespread. A review revealed that more than half of 60 deals since 1982 have been evident these last six years.