The Three Causes of Inversions: Reflections on Pfizer/Allergan and Notice 2015-79

6 Pages Posted: 22 Nov 2015 Last revised: 25 May 2017

Reuven S. Avi-Yonah

University of Michigan Law School

Date Written: November 20, 2015

Abstract

On November 19, 2015, Treasury released Notice 2015-79 (the “Notice”). The Notice represents Treasury’s most recent response to the second wave of inversions, i.e., transactions in which US corporations become subsidiaries of foreign corporations without a meaningful change in their underlying business or in the location of their corporate headquarters. It follows on the heels of the announcement that Pfizer Inc. is considering a merger with Allergan PLC, an inverted Irish company, and supplements Notice 2014-52 from September 2014. Unfortunately, just like Notice 2014-52, the Notice is unlikely to stem the tide, and is even unlikely to stop Pfizer/Allergan. For that, stronger executive and legislative action is needed. To understand the issues, it is important to know about the history of inversions and the three reasons that drive them.

Keywords: inversions, Notice 2015-79, Pfizer

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S., The Three Causes of Inversions: Reflections on Pfizer/Allergan and Notice 2015-79 (November 20, 2015). U of Michigan Law & Econ Research Paper No. 15-021; U of Michigan Public Law Research Paper No. 488. Available at SSRN: https://ssrn.com/abstract=2693877 or http://dx.doi.org/10.2139/ssrn.2693877

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

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