The Stop Corporate Inversions Act of 2024 tightens tax rules to prevent large American corporations from avoiding U.S. taxes by relocating their headquarters to foreign countries through a practice known as corporate inversion. The bill modifies the existing definition of what counts as a tax-dodging inversion by lowering the ownership threshold from 60 percent to 50 percent, meaning companies that are still majority-owned by former U.S. shareholders after moving abroad will be treated as domestic corporations for tax purposes. The legislation also establishes that inverted companies must be treated as domestic if they maintain substantial management and control in the United States or have at least 25 percent of their employees, assets, or income in America. The changes apply to corporate inversions completed after May 8, 2014, and take effect for tax years ending after that date.
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