The Motley Fool: What's a tax inversion?

April 22, 2015 12:10 AM

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A: A tax inversion happens when a company becomes a subsidiary of another company in another country, in order to take advantage of more favorable tax rules in that country.

Many American companies have done this in recent years, and the Obama administration has taken steps to reduce its appeal as an option. One of the biggest examples is the recent $50 billion acquisition of health care company Covidien by medical device giant Medtronic. Medtronic was originally based ...

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