Tax inversion

Tax inversion is a way that companies can try to reduce their taxes. When companies do this, they are trying to create a lower tax bill for themselves. It works like this: the company finds another company in a country where the taxes are lower than the taxes in the country where the company was originally based. Then, the company will merge with the other company and then pay taxes in that lower-tax country instead. It means that the company will have to pay less tax than if it stayed in the original country.