Tax: US targets intra-company loans

Escalating a 19-month regulatory assault against US companies’ shifting their tax addresses offshore, President Barack Obama’s administration last week also went after companies that have always been overseas.

A proposed regulation from the Treasury Department targets loans that foreign companies make to their US subsidiaries — a technique that loads the American units with tax-deductible interest payments while shifting their profits offshore.

The rule is aimed at so-called earnings stripping -- which US Treasury officials call a key strategy employed by US companies that have completed “inversions,” the transfer of their tax addresses to lower-tax countries.