The U.S. Treasury Department's final version of rulesaimed at curbing corporate inversions eliminates the threat to cashmanagement tools used by corporate treasuries, such as cashpooling, that was posed by the former version of the rules.

“In response to thoughtful feedback, Treasury is providing abroad exemption for cash pools and other loans that are short-termin both form and substance, and therefore do not pose a significantearnings stripping risk,” the Treasury said in its Oct. 13 announcement of the final version of the rules.

The Treasury's rules were designed to discourage U.S. companiesthat have undergone inversions from using earnings stripping, inwhich the foreign parent of a U.S.-based company makes a loan tothe U.S. unit, which then deducts the interest payments it makes onthat loan on its taxes. The rules allow the Internal RevenueService to treat related-party debt as part equity and part debt,limiting companies' ability to deduct their interest payments.