inversion

noun in·ver·sion \ in-ˈvər-zhən , -shən \
Updated on: 15 Nov 2017

Definition of inversion

plural inversions
1 : a reversal of position, order, form, or relationship: such as
a (1) : a change in normal word order; especially : the placement of a verb before its subject
(2) : the process or result of changing or reversing the relative positions of the notes of a musical interval, chord, or phrase
b : the condition of being turned inward or inside out
c : a breaking off of a chromosome section and its subsequent reattachment in inverted position; also : a chromosomal section that has undergone this process
2 : the act or process of inverting
3 a : a change in the order of the terms of a mathematical proportion effected by inverting each ratio
b : the operation of forming the inverse of a magnitude, a function, an operation, or an element
4 a : the conversion of dextrorotatory sucrose into a levorotatory mixture of glucose and fructose
b : a change from one stereochemical figuration at a chiral center in a usually organic molecule to the opposite configuration that is brought about by a reaction in which a substitution of one group is made for a different group
6 : an increase of temperature with height through a layer of air
7 : a corporate reorganization in which a U.S. corporation merges with or acquires a foreign corporation and restructures the U.S. corporation as a subsidiary of the newly created multinational company for the purpose of establishing a domicile in a foreign country and taking advantage of the country's corporate tax structure
  • U.S. businesses are buying foreign companies in countries with lower tax rates so they can switch their legal home and cut their tax bills. The process, known as inversion, is the hottest trend in mergers and acquisitions, driving some of the biggest takeovers this year.
  • —Tom Fairless and Shayndi Raice

Examples of inversion in a Sentence

  1. an inversion of the roles of parent and child

  2. Inversion of the two words changes the meaning of the sentence.

Recent Examples of inversion from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'inversion.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of inversion

1586


Financial Definition of INVERSION

inversion

What It Is

Corporate inversion is practice by U.S.-based companies of exchanging their registration with a subsidiary outside the U.S. in order to pay lower taxes.

How It Works

Many large companies in the U.S. have smaller subsidiary companies located outside of the country. Called "offshore subsidiaries," these smaller companies are registered and taxable in the country in which they are located. Since the tax burden for some wholly-owned foreign companies can be significantly lower under these circumstances, the U.S.-based parent company may engage in corporate inversion, swapping registrations with its offshore subsidiary so it is taxed at a lower rate.

For example, if U.S.-based Company XYZ owns Subsidiary ABC, located in the Caribbean, and ABC is taxed at a lower rate, XYZ may use corporate inversion to switch its U.S. registration with the Caribbean subsidiary in order to lower its overall tax burden.

Why It Matters

Corporate inversion, while a legitimate tax strategy, has serious implications for the revenue collected by the Internal Revenue Service (IRS). With the growing popularity of corporate inversion in recent years, the IRS has made an effort to impose penalties and other deterrents upon companies that engage in this practice.


INVERSION Defined for English Language Learners

inversion

noun

Definition of inversion for English Language Learners

  • : a change in the position, order, or relationship of things so that they are the opposite of what they had been

  • weather : a condition in which air close to the ground is cooler than the air above it


Medical Dictionary

inversion

noun in·ver·sion \ in-ˈvər-zhən, -shən \

medical Definition of inversion

1 : a reversal of position, order, form, or relationship: as
a : a dislocation of a bodily structure in which it is turned partially or wholly inside out
  • inversion of the uterus
b : the condition (as of the foot) of being turned or rotated inward — compare eversion 2
d : a breaking off of a chromosome section and its subsequent reattachment in inverted position; also : a chromosomal section that has undergone this process
2 a : the conversion of dextrorotatory sucrose into a levorotatory mixture of glucose and fructose
b : a change from one stereochemical figuration at a chiral center in a usually organic molecule to the opposite configuration that is brought about by a reaction in which a substitution of one group is made for a different group

Law Dictionary

inversion

noun in·ver·sion \ in-ˈvər-zhən \

legal Definition of inversion

: a corporate reorganization in which a U.S. corporation buys or merges with a foreign corporation and is restructured as a subsidiary of the newly created multinational company in order to establish a domicile in a foreign country with lower corporate taxes called also corporate inversion, tax inversion


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