Final and proposed regulations for BEAT were released on December 6, 2019. The final regulations define crucial terms including: applicable taxpayer; base erosion payment; base erosion tax benefit; and modified taxable income. The final regulations also provide various exceptions to the definition of base erosion payment, aggregation rules for purposes of determining whether a taxpayer qualifies as an applicable taxpayer subject to the BEAT, and guidance on the interaction of §59A with other provisions of the Code, including §163(j) and subchapter K (applicable to partnerships).
Proposed regulations published concurrently with the final regulations provide additional guidance relating to how a taxpayer determines its aggregate group and addressing the application of the BEAT to partnerships. The proposed regulations also include a new election under which a taxpayer may waive a deduction for purposes of §59A to avoid qualifying as an applicable taxpayer subject to the BEAT.
The Bloomberg Tax & Accounting special report, Base Erosion and Anti-Abuse Tax Final Regulations Roadmap, points out the key areas of the final regulations by topic and provides a brief overview of the rules provided in the final regulations.