Corporate inversions, the recently controversial corporate tax maneuver in which a U.S.-based multinational group restructures itself so that the U.S. parent of the group is replaced by a foreign corporation — typically in a low-tax jurisdiction — allow companies to reduce their overall level of worldwide taxation.

A company that inverts continues to pay the U.S. corporate rate on profits earned through U.S. operations, and foreign profits brought back to the U.S. will get taxed by the U.S. However, the profits earned abroad escape being taxed by the U.S.

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