Need cash? Borrow it from a foreign subsidiary

Description

Abstract: U.S. companies with foreign subsidiaries generally aren’t subject to tax on the subsidiary’s income until it’s “repatriated.” But what if a company needs a foreign subsidiary’s cash to fund operations, buy back stock or meet other needs? This article describes how it might be possible for a company to tap a subsidiary’s cash without generating a huge tax bill, by borrowing it in the form of short-term loans.