Page 47 - International Taxation IRS Training Guides

Inbound Financing

decision by a foreign MNE to
 Inbound financing is a
in the U.S. through a variety of financing
invest

designed to minimize U.S. taxable
arrangements

income

 One of
the most common goals from these

arrangements is
to generate U.S. deductions (usually

interest
deductions) that result in low tax or no tax to
the foreign related party receiving the payment.

 Foreign MNEs had flexibility in
how they set up these

financing structures:

• Debt

• Equity

• Hybrid Structures
(Instruments/Entities)

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