KPMG article: Effects of recent international tax developments on inbound private equity structures
Absent further changes in law, inbound structures are likely to continue to be preferred in most cases.
Before enactment of the “One Big Beautiful Bill Act” (OBBBA), private equity buyers generally preferred inbound multinational structures. The primary advantage of an inbound multinational structure was that it usually enabled the buyer to avoid application of the global intangible low-taxed income (GILTI) and subpart F rules, as well as having to manage foreign tax credit (FTC) limitation issues.
However, the OBBBA’s elimination of interest expense allocations to the GILTI category for purposes of determining a U.S. corporation’s FTC limitation, as well as the OECD’s side-by-side rules which disapply the undertaxed payment and income inclusion rules of Pillar Two to certain U.S. groups, could affect the calculus of whether to adopt an inbound or U.S.-parented structure. Nonetheless, because of certain technicalities with the OBBBA and the very broad scope of the exclusion in the side-by-side rules, absent further changes in law, inbound structures are likely to continue to be preferred in most cases.
Read a June 2026 article* in which the KPMG authors examine recent international tax developments that could affect private equity buyers’ decision-making on whether to adopt an inbound or U.S.-parented structure.
* This article originally appeared in Tax Notes Federal (June 8, 2026) and is provided with permission.