Treasury to limit tax-cut deals with inversion crackdown

Treasury Secretary Jacob Lew’s crackdown on inversions will get an immediate test as eight U.S. companies with pending deals decide whether to proceed - and other companies contemplating a foreign address now have to think twice.

According to Bloomberg, the new rules - which apply to deals that close starting this week - would prohibit companies moving their headquarters out of the U.S. from receiving “hopscotch” loans that let companies access foreign cash without paying U.S. taxes. They also curb actions that companies can use to make such transactions qualify for favorable tax treatment.

A wave of inversions caught lawmakers’ attention this year when large companies such as Pfizer Inc. and Walgreen Co. explored transactions and Medtronic Inc., AbbVie Inc. and Burger King Worldwide Inc. moved forward with deals.

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