Corporate dealmakers have a new complication to consider starting next year, with the introduction of a minimum tax that’s set to affect a type of divestiture that until now has gone untaxed. Some split-offs—where a publicly listed parent company hives off a unit and stockholders then choose whether to own shares in either the parent or the new company—are set to be affected by the new 15 percent corporate “book tax.”

Split-offs can generate earnings for the parent on its financial statements, and from 2023 onward, those earnings will be subject to the new 15 percent minimum levy for companies with at least $1 billion of profits reported to shareholders. Financial accounting figures weren’t previously used for determining corporate tax liabilities.

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