(Repeats story published late on Monday)
By Kevin Drawbaugh
WASHINGTON, July 21 (Reuters) - As more U.S. corporations dodeals to cut taxes by shifting their tax domiciles overseas, theSenate Finance Committee will hold a hearing on Tuesday focusedon these transactions known as inversions.
Nine such deals have been agreed to this year by companiesranging from banana distributor Chiquita Brands International,Inc to drugmaker AbbVie Inc and more are beingconsidered. The transactions are setting a record pace since thefirst inversion was done 32 years ago.
Witnesses at the Senate Finance Committee's hearing willinclude government officials and academics. Chairman Ron Wyden,a Democrat from Oregon, is expected to call for stand-alonelegislation to respond to the flurry of inversions that hasWashington on edge.
Democrats, searching for campaign issues before November'scongressional elections, have jumped on inversions, and severalof them have offered bills that would curb the deals.
But no new law is likely to result as long as Republicanscontend that inversion rules need to be part of a broaderoverhaul of the tax code, policy analysts said.
The Republican-controlled U.S. House of Representatives willnot act on inversions "unless there's comprehensive tax reform,and that's dead for this year," said Greg Valliere, chiefpolitical strategist at Potomac Research Group in a client noteon Monday.
Inversions are still rare, but they are becoming morecommon. Of the roughly 60 deals done since 1982, more than halfhave come in just the last six years, a Reuters review showed.
An inversion involves a U.S. corporation buying or settingup a smaller company abroad, then shifting its tax home base tothat company's country, which typically has lower tax rates thanin the United States.
Such deals seldom mean a U.S. corporation physically leaveshome. Usually an inversion means that a company will open asmall office abroad, perhaps in England or Ireland, as a newaddress for tax purposes, leaving major operations intact.
But the move can put foreign earnings out of the reach ofthe Internal Revenue Service and make other tax savings possiblethat can boost a multinational company's bottom line.
U.S. Treasury Secretary Jacob Lew urged Congress last weekto take steps quickly to discourage inversions.
In a letter to members of Congress, he said corporationsthat do inversions want to keep U.S. advantages - such as intellectual property protection, research support, financialsecurity and reliable infrastructure - without paying for them.
President Barack Obama's 2015 budget proposed makinginversions harder to do by raising the foreign ownershiprequired. Congressional Democrats have made similar proposals.
Drugstore chain Walgreen Co is weighing a possibleinversion. Drugmaker Pfizer Inc's bid in April to buy UKrival AstraZeneca Plc was structured as an inversion.That deal collapsed, but it drew attention to the issue. (Editing by Jan Paschal)
Astrazeneca (AZN)
