Tax Law Fails to Kill off Corporate America’s Prized Dodge

For many companies, it still makes sense to stash intellectual property in lower-tax jurisdictions overseas.

By Laura Davison | Updated on October 15, 2018

U.S. corporations have largely abandoned the contentious deals that allowed them to shift their addresses abroad for a lower tax rate. Yet a key part of the transactions is continuing quietly even after President Donald Trump’s tax overhaul.

The 2017 tax law was designed to stop traditional inversions, which had brought scrutiny and negative publicity for companies that moved their headquarters overseas, as well as to halt the flow of valuable intellectual property (IP) to low-tax countries. For companies that invert, the address change is generally the final step so they can more easily access the cash they’ve generated after years of shifting IP overseas.

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