2. Int'l Tax Update Significant Developments in the Global Tax System - Andrew Seidler
Base Erosion Anti-abuse Tax BEAT
BEAT – Base Erosion Anti-Abuse Tax Tax change Post reform law Considerations 43 Base Erosion and Anti Abuse Tax (BEAT) (effective for tax years beginning after Dec. 31, 2017) • 10% minimum tax on U.S. corporations (5% for 2018). • Applies where 10% of ‘modified taxable income’ (MTI) exceeds regular tax. • MTI is taxable income without regard to base erosion tax benefit (i.e., no deduction for base erosion payments). • Base erosion payments include any deductible amount paid/accrued to a foreign related party. • Includes payments for depreciable property or insurance payment. • Excludes items that reduce gross receipts (like cost of goods sold). • Threshold for related party status 25 percent vote or value. BEAT applies to U.S. corporations not treated as flow-through (e.g. S corps, REITS, RICs). USD 500 million of domestic gross receipts if base erosion percentage is 3 percent or higher. Members of U.S. consolidated group are treated as single corporation.
- Page 1 and 2: Helping with tax challenges whereve
- Page 3 and 4: Overview BEPS Global Tax Reform US
- Page 5 and 6: Corporate changes Tax change Post r
- Page 7 and 8: Corporate changes Tax change Post r
- Page 9 and 10: UK Planning Considerations: NOL Lim
- Page 11 and 12: Withholding Taxes After Brexit •
- Page 13 and 14: Withholding Taxes and the Digital E
- Page 15 and 16: Common Consolidated Corporate Tax B
- Page 17 and 18: Digital Economy Interim Measure Exa
- Page 19 and 20: BEPS Measures: Anti-hybrid rules In
- Page 21 and 22: Anti-hybrid provisions
- Page 23 and 24: US Hybrid Counteraction The Act den
- Page 25 and 26: UK approach compared to US Type Mis
- Page 27 and 28: Interest Limitation
- Page 29 and 30: Interest deduction - comparison wit
- Page 31 and 32: Global Intangible Low Taxed Income
- Page 33 and 34: GILTI Example Calculation GILTI Cal
- Page 35 and 36: Foreign Derived Intangible Income F
- Page 37 and 38: FDII Example US Corp US sales $500
- Page 39 and 40: FDII Example Step 4: Determine Rati
- Page 41: UK Planning Considerations: FDII Pu
- Page 45 and 46: UK Planning Considerations: BEAT In
- Page 47 and 48: Brexit Monitor Visit https://www.rs
- Page 49: THANK YOU
BEAT – Base Erosion Anti-Abuse <strong>Tax</strong><br />
<strong>Tax</strong> change Post reform law Considerations<br />
43<br />
Base Erosion<br />
and Anti Abuse<br />
<strong>Tax</strong> (BEAT)<br />
(effective for tax<br />
years beg<strong>in</strong>n<strong>in</strong>g<br />
after Dec. 31,<br />
2017)<br />
• 10% m<strong>in</strong>imum tax on U.S. corporations (5% for<br />
2018).<br />
• Applies where 10% of ‘modified taxable<br />
<strong>in</strong>come’ (MTI) exceeds regular tax.<br />
• MTI is taxable <strong>in</strong>come without regard to base<br />
erosion tax benefit (i.e., no deduction for base<br />
erosion payments).<br />
• Base erosion payments <strong>in</strong>clude any deductible<br />
amount paid/accrued to a foreign related party.<br />
• Includes payments for depreciable property or<br />
<strong>in</strong>surance payment.<br />
• Excludes items that reduce gross receipts (like<br />
cost of goods sold).<br />
• Threshold for related party status 25 percent<br />
vote or value.<br />
BEAT applies to U.S.<br />
corporations not treated as<br />
flow-through (e.g. S corps,<br />
REITS, RICs).<br />
USD 500 million of domestic<br />
gross receipts if base erosion<br />
percentage is 3 percent or<br />
higher.<br />
Members of U.S. consolidated<br />
group are treated as s<strong>in</strong>gle<br />
corporation.
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