The academic, political, and popular discourse regarding corporate residence in general and corporation expatriation in particular rests upon a faulty premise.
Numerous commentators have argued that the problem behind the inversion phenomenon and other maladies of the current international corporate tax regime is a flawed definition of corporate residence.
Abandoning the concept of corporate residence is the most thematic and most effective way to reform the international corporate tax regime.
Delaware, through its utter permissiveness, became the corporate residence of choice, much as the Cayman Islands is a paper domicile for secrecy-minded bankers.
First, in VE Holding Corp. v. Johnson Gas Appliance Co., the court had held that the definition of corporate residence in the general venue statute, §1391(c), applied to §1400(b).
It is no wonder that the current international corporate tax regime has proven unworkable and the reform proposals – which continue to rely upon the concept of corporate residence – fair little better.
This becomes possible under a popular tax-avoidance scheme being peddled by major accounting and law firms that involves, in addition to reincorporating in Bermuda, establishing corporate residence in a second sunny offshore jurisdiction, Barbados.
Joseph Clarke has come up with a half-dozen ideas over the past 20 years — a hotel, corporate headquarters, residences, office space — for a prominent downtown site three blocks from the Inner Harbor.
However, the literature has hitherto failed to address what I believe to be the fundamental questions that must underlie any discussion of corporate tax residence.
For anyone with a government or corporate pension, residence is almost a given.
