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Chorvat on Overseas Corporate Moves

"There has been bad publicity and rules have changed," says Professor Terrence Chorvat, commenting on reincorporation of U.S. companies in overseas tax havens. Chorvat was quoted in a MarketWatch article sparked by reports that Halliburton Co. has decided to move its executive and corporate headquarters to Dubai, in proximity to some of the world's largest oil reserves.

"I think there is some truth in the initial argument that they're going to Dubai because that's where the action is, but I think there's also somewhat of a U.S. tax-play," Chorvat told MarketWatch.

Current U.S. tax law is based on the site of incorporation, which in Halliburton's case will remain Delaware. U.S. companies operating overseas, however, often enjoy tax benefits indirectly from operation in a foreign location, since they do not have to pay U.S. income taxes on earnings of foreign subsidiaries until the money enters the U.S. In addition, U.S. payroll taxes normally do no apply to overseas employees.

Halliburton's Dubai move raises issue of expat taxes, MarketWatch, March 13, 2007. By Laura Mandaro.

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