UPDATE 1-U.S. senator eyes bill to halt corporate tax 'inversion'

Thu May 8, 2014 12:49pm EDT

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By Patrick Temple-West

WASHINGTON May 8 (Reuters) - U.S. Democratic Senator Carl Levin on Thursday said he plans to introduce legislation soon to prevent corporate inversions, an increasingly-popular transaction that involves U.S. companies reincorporating overseas to avoid U.S. taxes.

Levin, a long-time advocate for closing corporate tax loopholes, said he is talking with other senators about potential legislation.

"It's become increasingly clear that a loophole in our tax laws allowing these inversions threatens to devastate federal tax receipts. We have to close that loophole," said Levin in a statement.

Levin is the chairman of the Senate Permanent Subcommittee on Investigations, which has held hearings to shed light on U.S. companies' legal efforts to avoid U.S. taxes.

A recent bid from drug-maker Pfizer Inc to acquire AstraZeneca Plc, renewed attention on corporate inversions. The potential deal would allow U.S.-based Pfizer to re-domicile in Britain to take advantage of a significantly lower corporate tax rate there.

In April, days after the potential Pfizer deal was made public, the Obama administration said it was seeking ways to curb inversions.

(Reporting by Patrick Temple-West; Editing by Chris Reese and Tom Brown)