Treasury Secretary Jack Lew said Wednesday that executive action to prevent companies from moving their headquarters out of the U.S. for tax purposes was a “certainty” and that he hoped that it would be “very, very soon.”
Speaking at an event at UCLA Wednesday afternoon, Lew said “I’m hopeful that we’ll be able to take action very very soon” to curb tax inversions.
Inversions are tax maneuvers in which U.S. companies buy businesses in low-tax jurisdictions in order to move their headquarters there. Inversions deals have accelerated in recent years, most notably including Burger King’s merger with the Canadian chain Tim Hortons in August.
Facing congressional inaction, the Treasury has been weighing unspecified options to make inversions less attractive in recent weeks. Lew confirmed Wednesday that it would take action on one of those options, although he declined to give details about what measures were possible.
Lew said that companies considering inversions “should know that there is some very real probability — I’ve now said certainty — that we’re going to take action.”
“Any company considering an inversion is now on notice that there is action that’s going to be taken,” he added.
Lew clarified, however, that the administrative actions would not be a substitute for legislation. Treasury action “will remove a lot of the economic benefits of inversions, but it will not close the door — that requires legislation,” he said.
Lew was speaking at UCLA en route to the G-20 Meeting of Finance Ministers and Central Bank Governors in Australia. He noted that he will continue to be in contact with his staff working on inversions measures while he’s in Australia.
