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The Obama administration’s attempt to limit corporate inversions could end up making life harder for corporate treasurers.

In April, the U.S. Treasury rolled out proposed Internal Revenue Service regulations designed to curb inversions. The regulations’ unintended consequence would be to make it more difficult for companies to use cross-border cash pooling and other cash management and risk management tools.

In a corporate inversion, a company moves its legal domicile to a foreign country that imposes lower corporate taxes. Then it transfers earnings to the new parent company by issuing debt to the parent. The U.S. subsidiary pays interest on that debt and deducts that interest from its U.S. taxes, so the organization effectively pays tax on its earnings only in the low-tax country of the parent company.

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