Breaking News
Investing Pro 0
New! 💥 Get ProPicks to see the strategy that has beaten the S&P 500 by 829%+ Claim 60% Off

Proposed U.S. anti-inversion rules enter final review

Published Oct 04, 2016 08:40PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Proposed U.S. anti-inversion rules enter final review

By David Morgan

WASHINGTON (Reuters) - U.S. regulations, proposed by the Treasury to crack down on companies that try to reduce taxes by rebasing abroad, have begun a White House review and could be finalized shortly, officials said on Tuesday.

The regulations, which would make it difficult for U.S. business operations to avoid taxation while shifting profits overseas through a practice called "earnings stripping," were received by the White House Office of Management and Budget (OMB) last week. The agency has up to 90 days to decide whether the rules should be finalized or returned to Treasury for further consideration.

"We are satisfied we have addressed stakeholder feedback and are close to issuing final earnings stripping regulations," a Treasury spokesperson said.

The Obama administration has faced widespread criticism from the business community over its regulatory assault on tax inversions, which are tax-driven mergers in which a U.S. company acquires a smaller, foreign business in a low-tax country and shifts its headquarters there, if only on paper, to avoid higher U.S. taxes.

Business and industry groups have threatened lawsuits and called for the new rules to be withdrawn or heavily revised because of what critics say is the potential for unintended harm to business. Members of Congress have also accused the administration of overstepping its legal authority.

Earnings stripping occurs when an inverted company eludes U.S. taxes on its domestic operation by shifting profits overseas in the form of tax-deductible interest payments to its foreign parent. The new rules would change certain interest payments into equity dividends, which are not tax deductible in the United States.

The regulations were proposed in April, along with a temporary rule to prevent serial inversion deals by foreign companies. That rule, which is already the target of a lawsuit, has not yet been forwarded to OMB.

Proposed U.S. anti-inversion rules enter final review

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email