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October 7, 2008
IRS Allows Multinationals to Borrow Larger Sums of Cash from Overseas Subsidiaries
As a further response to the credit crisis (crash?), the American Internal Revenue Service issued a temporary guidance last Friday allowing multinationals to borrow cash from overseas subsidiaries for as long as 60 days, three times a year, without incurring corporate tax.
"Recognizing current liquidity constraints, we issued this temporary guidance," said Andrew C. DeSouza, a Treasury Department spokesman. He declined to comment on whether any specific companies or their representatives had pushed for the move. "I think we're recognizing there were companies out there that were having liquidity constraints," he said.
Those of you located outside the United States may find headquarters tapping you on the shoulder for your cash somewhat more often.
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