Pfizer-Allergan deal refocuses market on U.S. tax-inversion rules
Source: Reuters
Pfizer Inc's (PFE.N) buyout bid for Allergan Plc (AGN.N) has financial markets on edge over a possible new move by the U.S. Treasury Department against tax-inversion deals, but the outlook for any such steps was still unclear on Friday.
For months, Treasury has offered no fresh guidance on the inversion issue, leaving tax experts to speculate about what could come next. Inversions typically involve a U.S. multinational buying a smaller foreign rival and relocating to its home country, if only on paper, to escape U.S. taxation.
Allergan shares fell 2.3 percent on Thursday afternoon amid reports that Treasury might move to block its deal with Pfizer.
Possible steps the government might take include tightening the rules on two strategies related to inversions, tax experts said: "earnings stripping" and "skinny down" distributions.
Read more: http://www.reuters.com/article/2015/11/13/us-usa-tax-inversions-idUSKCN0T22IE20151113#S7u1iYX3tHt7A2BL.97