Notice 2014-52, released by the US Treasury Department on
September 22, 2014, is intended to disrupt, and in some cases
prevent, so-called corporate inversion transactions that have not
been completed prior to the notice's release. Although the
notice includes very detailed rules, it very generally takes a
two-pronged approach to discourage inversions after September 21,
2014.
Background on US "anti-inversion" rules
Internal Revenue Code ("Code") section 7874, enacted
as part of the American Jobs Creation Act of 2004, subjects
expatriated entities (and their affiliates) to adverse US tax
consequences. Generally, if a US company transfers its properties
to a foreign corporation and at least 80 percent of the stock (by
vote or value) of the new foreign parent company is held by former
shareholders of the US company, then the new foreign parent company
(the "surrogate foreign corporation") will be subject to
US tax as though it were a US corporation, notwithstanding
