US moves to dissuade firms from moving abroad to lower taxes

Markets Associated Press

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

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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.

Republicans quickly criticized the rules. Sen. Orrin Hatch, R-Utah, warned they could jeopardize American businesses and the U.S. economy.