WASHINGTON, D.C. –(ENEWSPF)—June 8, 2015. U.S. Senator Dick Durbin (D-IL) today released the following statement after Syngenta AG released documents showing that Monsanto intends to move its corporate headquarters overseas as part of its proposed acquisition of Syngenta, but only on paper, in order to avoid paying U.S. taxes – a process known as “inversion”. Durbin’s Stop Corporate Inversions Act of 2015 would lower the 80% continuity of ownership test under Section 7874 of the tax code to 50%, effectively preventing Monsanto from moving forward with its plan to dodge U.S. taxes by acquiring Syngenta.
“It’s clear that Monsanto – a company that has prospered and expanded in large part due to U.S. taxpayer-funded programs and services – intends to reincorporate overseas as part of its proposed acquisition of Syngenta in order to avoid paying U.S. taxes. Hundreds of millions of dollars that could be invested in the infrastructure, education and research that companies rely on will be lost if Monsanto is allowed to go through with this corporate inversion scheme,” said Durbin. “Congress can and should act now to close the loophole that allows corporations to avoid their tax responsibility.”
In January, Durbin joined U.S. Senator Jack Reed (D-RI) and U.S. Representatives Sandy Levin (D-MI) and Lloyd Doggett (D-TX) to introduce the Stop Corporate Inversions Act of 2015 that would close the corporate inversion loophole and save nearly $34 billion over ten years. Since 2004, more than 40 U.S. corporations have inverted – many by acquiring a smaller foreign company to avoid Section 7874 of the Internal Revenue Code, which Congress enacted to discourage companies from moving their tax address to a foreign jurisdiction as part of an acquisition.
Durbin has also joined Reed, Levin, Doggett, U.S. Senators Sheldon Whitehouse (D-RI) and Al Franken (D-MN) and U.S. Representative Rosa DeLauro (D-CT) in introducing legislation that would ban federal contracts and subcontracts for inverted companies and expand the definition of an inverted corporation. Durbin has a similar amendment pending to the National Defense Authorization Act of Fiscal Year 2016 that would ban defense contracts for inverted corporations and expand the definition of an inverted corporation.
In May, following news reports that Monsanto was considering acquiring Syngenta AG based in Switzerland, Durbin urged the Chairman and CEO, Hugh Grant, to keep its corporate tax headquarters in the U.S. Additional information and the text of that letter can be found HERE.