U.S. Treasury, IRS issue more curbs to corporate tax inversion deals

[Eugene]

Source: Reuters

Markets | Mon Apr 4, 2016 5:50pm EDT

U.S. Treasury, IRS issue more curbs to corporate tax inversion deals

The U.S. Treasury Department and Internal Revenue Service on Monday announced new steps to curb tax-avoiding "inversion" deals that U.S. companies do with foreign corporations, including earnings stripping.

The latest steps impose a 3-year limit on foreign companies bulking up on U.S. assets to avoid ownership requirements for a later inversions deal, the Treasury said in a statement.

The Treasury also proposes tackling post-inversion earnings stripping with new limits on related-party debt for U.S. subsidiaries. Earnings stripping covers a range of financial dealings that shrink the taxable U.S. profits of multinationals, including those that have moved their tax domiciles abroad in "inversion" deals and others.

Treasury Secretary Jack Lew said the actions would "further rein in" inversions, but added that only legislation in Congress could prevent such deals.

Last November, the Treasury clamped down on inversions by limiting a U.S. acquirer's ability to set up a new foreign parent in a third country and to "stuff" assets into a foreign parent to meet post-inversion ownership limits.

(Reporting by Lindsay Dunsmuir and Kevin Drawbaugh; Editing by Diane Craft)

http://www.reuters.com/article/us-usa-tax-inversions-idUSKCN0X1299

[StoneCarver]

1. Inversions are such a scam

Stockholders get hit by inversions hard because it's treated as a disbursement, even though you get nothing for it. In the inversion deal is usually language that pays the taxes of senior executives and directors, but not stockholders. We just got hit with a 30K tax bill for the Medtronic inversion! What a scam!
Stonecarver