Politics and Money

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How Firms Tap Overseas Cash
By Kate Linebaugh | The Wall Street Journal – 15 hours ago.

U.S. companies say much of their cash is trapped overseas. But that doesn't mean they can't put it to use at home.

With some careful structuring, companies including Hewlett-Packard Co. and General Electric Co. have set up ways to borrow money from their foreign subsidiaries. In some cases, the firms use the funds for daily operations or to buy back stock.

The loans have to be short term. Yet when the borrowing is carefully set up to comply with Internal Revenue Service rules and U.S. auditing standards, the funds can be used over and over without incurring taxes.

Companies are not required to disclose these moves, which makes it difficult to assess how many use them. In interviews, corporate treasurers, chief financial officers and tax attorneys say the practice is common as more cash piles in overseas accounts.
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http://finance.yahoo.com/news/firms-tap-overseas-cash-025500478.html