International Business Machines Corp saved about $1.6 billion last month by using a corporate tax loophole that has since been closed, the Wall Street Journal reported in its online edition on Wednesday.
IBM said it had structured a $12.5 billion stock repurchase to take advantage of funds it earned overseas without making them subject to US corporate tax rates. IBM saved about $1.6 billion in the move, the journal said, citing a person familiar with the transaction.
Neither IBM nor the Internal Revenue Service (IRS) was immediately available to comment.
The IRS announced plans to issue regulations making companies pay US taxes when they buy back their stock on May 31, two days after IBM's transaction, the journal reported. Its new regulations would treat funds used for buybacks as repatriated earnings.