July 01, 2016
International Tax Co-Leader Doug Nakajima authored an article about new Section 385 regulations governing the classification of corporate debt, for Bloomberg BNA’s Daily Tax Report.
The Treasury Department and the Internal Revenue Service proposed new regulations April 4 under tax code Section 385 (REG-108060-15). Although announced as part of the ongoing effort to curb corporate inversions, the proposed regulations focus on related-party corporate indebtedness and, if made effective without significant changes, will have far-ranging impact on corporate ownership and capital structures well beyond the inversion-focused motivation.
The new rules will have implications to the treatment of corporate interests in the targeted cross-border environment, but also in a number of purely domestic situations.