Repatriation tax avoidance (original) (raw)

Repatriation tax avoidance is the legal use of a tax regime within a country in order to repatriate income earned by foreign subsidiaries to a parent corporation while avoiding taxes ordinarily owed to the parent's country on the repatriation of foreign income. Prior to the passage of the Tax Cut and Jobs Act of 2017, multinational firms based in the United States owed the U.S. government taxes on worldwide income. Companies avoided taxes on the repatriation of income earned abroad through a variety of strategies involving the use of mergers and acquisitions. Three main types of strategies emerged and were given names—the "Killer B", "Deadly D", and "Outbound F"—each of which took advantage of a different area of the Internal Revenue Code to conduct tax-exempt corporate reorganizations.