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Report: US Treasury considers modifying corporate inversion tax rules

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Report: US Treasury considers modifying corporate inversion tax rules

The U.S. Treasury Department is looking at modifying a tax rule that restricts companies from transferring cash to overseas branches to avoid paying higher taxes in the country, Bloomberg News reported, citing several people familiar with the discussions.

The Obama administration introduced the so-called debt-equity rules in 2016 to prevent corporate inversion, in which U.S. companies transfer their headquarters to a country with lower taxes, then loan cash to their domestic divisions and deduct interest from filings with the Internal Revenue Service.

While some groups such as the Organization for International Investment and the U.S. Chamber of Commerce favor getting rid of the tax completely, the Treasury is unlikely to fully repeal the rule, Bloomberg reported.