This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here. favicon LAWANDTAX-NEWS.COM
HOME | CONTACT | RECRUITMENT | ABOUT | LEGAL | PRIVACY & COOKIES Join us on Twitter Lowtax Facebook page Join our discussion on LinkedIn Join us on Google+ Delicious Subscribe to the Tax-News RSS Feed


Articles »

Country Home Pages

British Virgin Islands
Hong Kong
Isle of Man
South Africa

Daily Tax Quote

Lowtax Network Sites
Lowtax Network Portal: 'Low-tax' business and investment in the top 50 jurisdictions covered in exceptional detail.
Tax News: Global tax news, continuously updated through the day.
Expat Briefing: A free online publication serving international expatriates and featuring world news, forums, events, in-depth country information and reliable investment and personal taxation guides.
Law & Tax News: Daily news and background data on tax and legal developments for international business.
Offshore-e-com: A topical guide to offshore e-commerce focused on tax and regulation.
Lowtax Library: One of the web's largest and most authoritative business and investment information sources.
US Tax Network: The resource for free online US taxation information, covering: corporate tax, individual tax, international tax, expatriates, sales and e-commerce tax, investment tax.
Offshore Trusts Guide: OTG publishes news, features and newsletters on the use of offshore trust structures.
TreatyPro: Online tax treaty resource.
Global Incorporation Guide [GIG]: A BSI / Lowtax Network international business smart tool.
No Inversion For Walgreens In Alliance Boots Deal

by Mike Godfrey,, Washington Wednesday, August 13, 2014

Walgreens has decided against moving its tax residence from the United States to Switzerland by way of a "corporate inversion" in exercising its option to purchase the remaining 55 percent stake in Alliance Boots.

The transaction, which is expected to be completed in the first quarter of 2015, involves a share purchase to combine fully the two companies into what is being called "the first global pharmacy-led, health and wellbeing enterprise." It will include Walgreen Co. (the largest drugstore chain in the US), Boots (the UK and Republic of Ireland's leading pharmacy-led health and beauty retailer), Pharmaceutical Wholesale and International Retail (including Alliance Healthcare, Europe's largest pharmaceutical wholesaler), and the remaining Global Brands.

Although Walgreens presently has an effective tax rate close to the headline US corporate tax rate of 35 percent, it has decided not to gain the reported USD4bn in tax savings over five years that could have been available to it by moving the company's base to Switzerland, where Alliance Boots is headquartered. A new holding company will now be formed, to be named Walgreens Boots Alliance, Inc., domiciled in the US and headquartered in the Chicago area.

Corporate inversions have been used by US companies when bidding for foreign companies as a means of moving away from America's high corporate tax rate. Under the present tax code, a company that merges with an offshore counterpart can, under certain conditions, move its headquarters abroad, and take advantage of the lower corporate tax rates in foreign jurisdictions.

Despite the fact that "the original option transaction would not qualify for an inversion under the current tax inversion rules," Walgreens confirmed that it "undertook an extensive analysis to explore the feasibility of a restructured inversion transaction that would provide the company with the customary level of confidence needed to withstand Internal Revenue Service (IRS) review and scrutiny."

It added that the company "considered a wide range of issues, including the potential financial benefits (and their sustainability) and the technical viability of a restructured inversion transaction under current US law. The company also was mindful of the ongoing public reaction to a potential inversion and Walgreens unique role as an iconic American consumer retail company with a major portion of its revenues derived from government-funded reimbursement programs [and with, currently, essentially no foreign operations]."

"We took into account all factors, including that we could not arrive at a structure that provided the company and our board with the requisite level of confidence that a transaction of this significance would need to withstand extensive IRS review and scrutiny," said Greg Wasson, who will be President and CEO of Walgreens Boots Alliance. "As a result the company concluded it was not in the best long-term interest of our shareholders to attempt to re-domicile outside the US."

Aside from concerns that it could have been involved in a protracted argument with the IRS, and potentially lose government contracts, Walgreens is thought to have been influenced by the growing anti-inversion political discussions in the US, and in particular the legislative proposals in Congress, and White House efforts to look at possible administrative actions that could reduce the tax benefits of inversions.



One of the web's largest and most authoritative business and investment information sources. Alongside topical, daily news on worldwide tax developments, you can receive weekly newswires or access up-to-date intelligence reports on a range of legal, tax and investment subjects.


Our 16 constantly updated intelligence reports cover every important aspect of 'offshore' and international tax-planning in depth, including banking secrecy, the EU's savings tax directive, offshore funds, e-commerce, offshore gaming and transfer pricing. Reports are available for immediate downloading or as subscription services with news pages.

Advertising & Marketing

With over 50,000 qualified readers every month our web-sites offer a number of cost effective, targeted advertising, sponsorship and marketing opportunities:

Display advertising - from 'skyscrapers' to 'buttons'
Content/article submission and sponsorship
Opt-in email marketing
On-line Services Directory listings

Click here to learn more or contact Charles Bell on +44 (0)1424 205 425 or at and he will put you in touch with your regional rep.

News & Content Solutions

Could your corporate web-site or newsletter benefit from incorporating regularly updated news and content tailored to serve your clients' interests? We can provide a variety of maintenance-free news and content solutions that can be seamlessly integrated and dynamically delivered:

Customised, personalised 'own-brand' news services
Newsletter content and management
News Headlines Tickers

Click here to learn more or contact Charles Bell on +44 (0)1424 205 425 or at and he will put you in touch with your regional rep.

Important Notice: Wolters Kluwer TAA Limited has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.

All rights reserved. © 2017 Wolters Kluwer TAA Limited

All content on this site has been provided by BSIRN.