The US Treasury has recently issued significant federal tax regulations in an attempt to stem the increasing number of tax-motivated corporate ‘inversions’, whereby a US parented company and a non-US company combine and locate the tax residence of the merged company in a non-US jurisdiction. These regulations not only formally adopted rules from 2014 and 2015 IRS Notices, but also introduced new rules not contained in any prior guidance and made substantive modifications to the rules in the previous notices. Critics would argue that it is the lack of reform to the US corporate tax code which has undoubtedly led and may continue to lead companies to reconsider their US tax residence.
