Jack Lew

US moves to dissuade firms from moving abroad to lower taxes

The U.S. Treasury Department has issued rules to limit the allure of "tax inversions" — whereby companies trim their tax bills by moving abroad.

The rules would limit companies' ability to make internal loans that saddle their U.S. subsidiaries with debt and shift profits to countries with lower tax rates — a process called "earnings stripping." Treasury softened the rules it proposed in April to avoid disrupting normal business operations.

"We have taken a series of actions to make it harder for large foreign multinational companies to avoid paying U.S. taxes and reduce the incentives for U.S. companies to shift income and operations...