Boston, MA 09/10/2014 (wallstreetpr) – Recently Medtronic, Inc. (NYSE:MDT) created a buzz around when it decided to merge with AbbVie Inc (NYSE:ABBV) in order to save a huge sum of tax implications. Due to the tax system that exists in USA, any company can take tax advantage by acquiring any company that has its headquarter in another country. A lot of companies executed this type of practice in recent times in order to save huge tax amount. It increased the problems for Obama commission in regard with stopping this tax payment loss. Recently Jacob J. Lew, Treasury Secretary said, “Obama commission can make tax inversions less attractive for U.S. companies if Congress doesn’t do anything to stop the current practices.”
When can the change be introduced:
According to Lew, U.S. Tax system is ‘broken’ which is why companies prompt to use its loopholes for their advantage. They move their base to any other country and save tax. The administration is thinking seriously about this matter, and a possible action to limit these inversions can be taken in the near future. While interviewing with Bloomberg Television at the Treasury Department in Washington, he said that if Congress didn’t act soon to reduce the tax inversions, then Obama administration would take a stand against this issue. He further said that the commission would not rule out the need of legislation completely, but it would surely cut down the amount that these companies save by exercising these transactions. It would certainly de-motivate those companies that want to take shortcuts to save tax.
Recently Lew said that if Congress failed to take a stand against these practices, then treasury would have to come ahead and put a limitation on these tax aversions. A lot of companies have been executing this way of tax saving, which is hurting U.S. government in terms of tax revenues.
