Sullivan & Cromwell Discusses U.S. Tax Consequences of EU State Aid Recoupment

On September 15, the IRS and Treasury Department proposed, in Notice 2016-52 (the “Notice”), new rules that limit the ability of U.S. multinational groups to claim credits against U.S. taxes for significant foreign tax adjustments (i.e., adjustments of more than $10 million).  Foreign assessments within the scope of the Notice include (but are not limited to) those that may arise in connection with the state aid investigations that have been initiated by the European Commission over the last several years.

The Notice describes two categories of transactions that might otherwise allow a U.S. multinational to expedite … Read more

Sullivan & Cromwell discusses New Anti-Inversion Notice

SUMMARY

On September 22, 2014, the Internal Revenue Service (the “IRS”) and the Treasury Department (the “Treasury”) issued Notice 2014-52 (the “Notice”) announcing that the Treasury and the IRS intend to issue regulations that will address inversion transactions and certain post-inversion transactions that the IRS and the Treasury characterize as tax avoidance transactions. According to the Treasury, the forthcoming regulations are intended to reduce the potential tax savings that could be extracted from inversion transactions and generally tighten the rules on cross-border mergers. The Notice is generally applicable to acquisitions completed on or after September 22, 2014 (even if completed … Read more