What Mcdermott, Tyco, And Herbalife Essay

1784 Words Oct 12th, 2014 8 Pages
Stuart Casey
Professor Ryder
Corporate Inversions

Do you know what McDermott, Tyco, and Herbalife have in common? Even though they are all in different industries they have all taken advantage of the tax breaks that come with a corporate inversion. Tax inversions are a relatively new idea in the history of taxes. The first company to succeed in the modern form of inversions was an oil service and construction company located in Houston, Texas called McDermott. In 1984, McDermott did not buy a foreign subsidiary or merge with a foreign company to move “offshore”, but just moved its tax home to Panama. It would be another 10 years before the next company to complete the move overseas. This happened when a cosmetic company called Helen of Troy moved to Bermuda in 1993. This was accomplished by forming a shell company to be the parent-company to Helen of Troy. This transaction was completely tax-free to both the company and its shareholders. Since the inversions of McDermott and Helen of Troy many companies have successfully navigated the rules and regulations that are required of this kind of tax transaction. Some of the high profile inversions that have happened include: Chicago Bridge & Iron (Netherlands), Transocean (Cayman Islands), Accenture (Bermuda), and Chiquita Brands (Ireland). A corporate inversion is a transaction in where a United States corporation 's stock or assets are transferred to a foreign corporation to reduce tax. The foreign corporation will…

Related Documents