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S&P warns of downside to corporate tax inversions: lower credit ratings
S&P warns of downside to corporate tax inversions: lower credit ratings

American companies shifting their headquarters overseas to reduce taxes face a potential downside -- lower credit ratings, Standard & Poor's warned in a new report. So-called inversions, which have been on the rise, involve a U.S. firm buying a smaller rival in a foreign country with a lower corporate tax rate and moving its headquarters there. But the attraction of reducing tax bills through the maneuver leads to "more aggressive financial policies" that raise credit risks for companies. according to S&P, one of the three top credit rating companies. For several reasons, S&P said firms considering an offshore tax shift should be guided by the Latin phrase caveat emptor,...

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