|IRS’ New Regulations on Corporate Inversions|
The US Treasury Department has issued further notices aimed at discouraging "corporate inversions".
The Internal Revenue Service (IRS) and the US Department of the Treasury issued Notice 2015-79 which announced the US government's intention to issue regulations that would make it more difficult to avoid existing inversion rules and to reduce the tax benefits thereof.
According to the Department of the Treasury US companies are "taking advantage of an environment that allows them to move their tax residence overseas to avoid paying taxes, without making significant changes in the nature of their overall operations".
For deals closed from the date of the announcement (November 19) the following will make it more difficult for US companies to undertake a corporate inversion:
In order to reduce the tax benefit of inversions completed on or after September 22, 2014, the notice also limits "the ability of an inverted company to transfer its foreign operations to the new foreign parent after an inversion transaction without paying current US tax".
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Nov.25, 2015