Final and proposed BEAT regulations: Additional analysis

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December 2019

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Overview

Treasury and the IRS on December 2 released 343 pages of Final Regulations and 59 pages of Proposed Regulations for the Base Erosion and Anti-Abuse Tax (BEAT) under Section 59A as enacted by the 2017 tax reform legislation. The BEAT rules require certain corporations to pay a minimum tax on taxable income as computed without certain deductions for certain payments to foreign related parties.

The takeaway

The Final Regulations provide additional guidance related to the mechanics of determining a taxpayer’s BEAT liability, and clarify the application of Section 59A to partnerships, banks, registered security dealers, and US consolidated groups. The Final Regulations also provide an anti-abuse rule that generally disregards certain transactions undertaken with a principal purpose of avoiding Section 59A. Taxpayers should review and assess the impact of the provisions in the Final and Proposed Regulations.

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Doug McHoney

International Tax Services Leader, PwC US

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