Sept. 22 (Bloomberg) — The U.S. Treasury Department announced steps that will make it harder for U.S. companies to move their addresses outside the country to reduce their taxes, clamping down on the practice known as inversions.
The rules, which apply to deals that close today or after, include a prohibition on "hopscotch" loans that let companies access foreign cash without paying U.S. taxes and curbs on actions that companies can take to make an inversion attractive for tax purposes.
Treasury Secretary Jacob J. Lew told reporters on a conference call today that he wanted to make companies think twice before considering an inversion. He said Treasury also is reviewing other potential actions it can take.
"This action will significantly diminish the ability of inverted companies to escape U.S. taxation," he said. "For some companies considering deals, today's action will mean that inversions no longer make economic sense."
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