WASHINGTON (Reuters) - President Donald Trump on Friday will order the U.S. Treasury Department to review Obama-era rules written to discourage U.S. companies from moving their headquarters overseas to cut their tax bills, Treasury Secretary Steven Mnuchin said.
Mnuchin told reporters at a briefing that an executive order to be signed by Trump later in the day will direct Treasury to review tax-related regulations adopted over the past 18 months under former President Barack Obama.
Asked if that would include rules against tax-driven foreign corporate deals known as inversions, Mnuchin said: “It’s one of the significant things and one of the things we would be looking at.”
Trump and Republicans in Congress view tax reform as the best vehicle for eliminating what they say are tax incentives for U.S. companies to move their headquarters, manufacturing facilities and jobs overseas.
Instead, Obama used regulation to crackdown on inversions after a wave of tax-motivated mergers that occur when a U.S. company is bought by a smaller foreign firm in a low-tax country and moves there to avoid paying higher taxes.
The move was backed by Democrats in Congress and academics as a responsible step to prevent corporations from exiting the U.S. tax system.
But rules came under fire from Republicans, who said the measures overstepped administration authority and could discourage foreign investment in the United States.