Key takeaways:

• The Treasury Department issued a notice that is intended to deter inversion transactions that close on or after September 22, 2014.
• Although the notice has a broad scope, it does not address “earnings stripping” transactions, which are inversions where the US tax base is eroded using related-party debt. Treasury may, however, issue guidance on earnings stripping transactions in the future, possibly with retroactive effect to the extent the guidance applies only to inverted groups.
• The notice will deter inversions that depend on accessing cash held by non-US subsidiaries of US groups without significant US tax cost.