Daily Tax Update - October 15, 2014: AbbVie to Reconsider Inversion Deal

AbbVie to Reconsider Inversion Deal:  AbbVie Inc. announced yesterday that its Board of Directors will meet by October 20 to reconsider its recommendation to shareholders to approve a $51.5 billion acquisition of Shire Plc that would move its legal address to the UK.  AbbVie noted that the board will consider the impact of the proposed changes to the tax regulations announced September 22 by the Treasury Department, including the impact to the fundamental financial benefits of the transaction.  Shire released a statement today encouraging AbbVie to proceed with the offer on the agreed terms.

EU Commission Orders Spain to Recover Aid Granted Through Tax Benefits:  After an in-depth investigation, the European Commission has concluded that a Spanish tax provision benefitting companies acquiring foreign competitors is incompatible with EU state aid rules.  The provision in question permits Spanish companies to deduct the financial goodwill arising from the indirect acquisition of foreign companies.  The Commission ordered recovery of the aid on the grounds that the beneficiaries received a selective economic advantage over their competitors.

The European Commission press release can be found here.