The IRS issued Tuesday, Sept. 1, finalized regulations that provide additional guidance on the base erosion and anti-abuse tax (BEAT).
The BEAT regulations (T.D. 9910) help deter large multinational enterprises from reducing their tax liability through certain payments made to foreign-related parties and certain tax credits.
The final regulations retain the basic approach and structure of the proposed regulations (REG-112607-19) issued in December 2019, with certain revisions. The final regulations permit an election to waive certain deductions to avoid a potential cliff effect that worried some taxpayers.
To be subject to the BEAT, which functions essentially as a minimum tax, businesses must have average annual gross receipts of at least $500 million as well as a so-called base-erosion percentage above a specified threshold. Learn more.