Penn State Law's Center for the Study of Mergers and Acquisitions presents a free, public interest webinar, An Introduction to Inversions.

Watch It Live

The webcast will begin at 12:30 p.m. on Sept. 17.

Much news coverage has been given to the proposed merger of Burger King and Canada's Tim Hortons in what is referred to as an "inversion" transaction. Several other companies have recently completed (i.e., Endo Health) or are currently in the middle of (i.e., Medtronic) such transactions.

Inversions employ complex corporate transactions to cause a U.S. company (e.g., Burger King) and a foreign company (i.e., Tim Hortons) to become subsidiaries of a new foreign holding company with the shareholders of the U.S. company owning a controlling interest in the new holding company. Inversions can be used to accomplish two principal tax effects:

1. moving income earned in the U.S. into the foreign holding company, where it is subject to a lower tax rate, and
2. avoiding the U.S. tax that applies when the earnings of a foreign subsidiary of a U.S. corporation (e.g., a Mexican subsidiary of Burger King) are repatriated to the U.S. parent (i.e., Burger King) in the form of dividends.

Many members of Congress, particularly on the Democratic side, are concerned with inversions and want to take measures to deter them. Additionally, the Obama Administration has, for a significant period of time, been urging Congress to take specific action against inversions, and recently, President Obama called inverters "corporate deserters." Further, on Sept. 8, Treasury Secretary Jack Lew said: "Treasury is completing an evaluation of what we can do [administratively] to make these deals less economically appealing, and we plan to make a decision in the very near future."

Thus, there is a real possibility of legislative and administrative action on inversions, and the purposes of this panel are to provide an introduction to:

• The reasons for inversions;
• Common structures used in inversions;
• The current state of the law governing inversions; and
• Potential legislative and administrative actions on inversions.

The event will be a panel discussion between Brian Davis, tax partner in the Washington, D.C., office of Ivins, Phillips & Barker and an expert on international tax and inversions, and Omri Marian, assistant professor of law at the University of Florida Levin College of Law and author of a forthcoming law review article on inversions. The discussion will be moderated by Samuel C. Thompson, Jr., professor of law and director of the Center for the Study of Mergers and Acquisitions at Penn State Law and author of several articles on tax inversions.