The new corporate tax shelter is a “merger abroad”, the New York Times says in an article yesterday.“Many companies that have recently moved their domicile for tax reasons have chosen European countries with low tax rates, like Ireland and the Netherlands, rather than be tarred by relocating to Bermuda or a Caribbean tax haven,” says the NYT article by David GellesThe article also says that due to increasing scrutiny of tax shelters: “There are signs that the Obama administration and Congress may try to tighten the rules again.“Both the House Ways and Means Committee and the Senate Finance Committee are working on draft legislation for comprehensive tax reform that is expected to include new rules intended to curtail inversions while also trying to make the United States a more competitive place for multinationals to call home.”The article says that in moving to Europe, companies are looking to “avoid the scrutiny brought on by moving to such obvious tax shelters, and take advantage of the more favourable business conditions in countries like Ireland, which also has a highly skilled work force”.The NYT article says: “From New York to Silicon Valley, more and more large American corporations are reducing their tax bill by buying a foreign company and effectively renouncing their United States citizenship.”Examples include Japan’s Tokyo Electron and Applied Materials. The merged company will save millions of dollars a year by moving — not to one side of the Pacific or the other, but by reincorporating in the Netherlands, the article says.It continues: “Reincorporating in low-tax havens like Bermuda, the Cayman Islands or Ireland — known as “inversions” — has been going on for decades. But as regulation has made the process more onerous over the years, companies can no longer simply open a new office abroad or move to a country where they already do substantial business.“Instead, most inversions today are achieved through multibillion-dollar cross-border mergers and acquisitions. Robert Willens, a corporate tax adviser, estimates there have been about 50 inversions over all. Of those, 20 occurred in the last year and a half, and most of those were done through mergers.”The first corporate inversion occurred more than 30 years ago, when McDermott, an oil and gas company, moved to Panama in 1982.“Twelve years later, Helen of Troy, which makes household goods like blow dryers, reincorporated in Bermuda,” the article says.“Tyco went to Bermuda in 1997 to lower its tax bill. A year later, Fruit of the Loom moved to the Cayman Islands. And in 2001, Ingersoll-Rand reincorporated in Bermuda.”