New Section 59A: Base Erosion and Anti-Abuse Tax (the "BEAT")

Tax Benefit Limitations on Transactions and Other Challenges for U.S. and Non-U.S. Based Multinationals

Recording of a 90-minute CPE webinar with Q&A


Conducted on Wednesday, June 6, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This CPE webinar will provide tax professionals and advisers with an in-depth understanding of the base erosion and anti-abuse tax (BEAT) under §59A. The panel will discuss the strict rules, requirements and limitations of §59A for transactions between U.S. and non-U.S. affiliates and available planning techniques to maximize tax savings for multinational companies.

Description

The BEAT presents challenges for common business structures used by both non-U.S. based and U.S.-based multinationals. Non-U.S. corporations with income effectively connected to a U.S. trade or business and related party payments may be subject to the BEAT, requiring a careful analysis of the new tax rules.

The BEAT targets U.S. tax-base erosion by imposing an additional tax liability on certain corporations that make payments to related foreign persons by adding back to taxable income certain deductible payments made to such foreign persons. The BEAT amounts to an alternative minimum tax on a taxpayer’s taxable income regardless of the tax benefits arising from the payments to foreign persons. This modified taxable income is subject to a tax rate of 5% starting from the 2018 tax year and increasing to 12.5% beginning in 2025.

Counsel and tax professionals must be aware of the applicability of §59A and any allowable tax planning techniques available to reduce or limit a taxpayer’s exposure to the BEAT.

Listen as our panel discusses the implications of §59A to the operations of multinational corporations, determining modified taxable income subject to the new tax, and best practices for identifying transactions and operations exposing corporations to §59A.

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Outline

  1. The impact of new §59A on non-U.S. Based and U.S.-based multinationals
  2. Analyzing the reporting requirements and exemptions of the BEAT
  3. Identifying transactions that may be subject to the BEAT
  4. Determining modified taxable income subject to §59A
  5. Tax rate application and methods of calculating the BEAT
  6. Tax planning tips limiting exposure and reducing taxable income subject to the anti-abuse tax

Benefits

The panel will review these and other key issues:

  • Determine the applicability of §59A to U.S. based corporations and non-U.S. affiliates
  • Methods in calculating modified taxable income and applicable tax rates
  • Identifying transactions or operations subject to the BEAT
  • The impact of net operating losses in determining modified taxable income
  • Recognizing the interaction of BEAT with other new tax law provisions
  • Tax planning methods in reducing or limiting BEAT exposure

Faculty

Leeds, Mark
Mark H. Leeds

Partner
Mayer Brown

Mr. Leeds focuses his practice on the tax consequences of a variety of capital markets products and strategies. He...  |  Read More

Odintz, Joshua
Joshua D. Odintz

Partner
Baker & McKenzie

Mr. Odintz is the managing partner of the firm's Washington Tax Department. He held high-level government positions...  |  Read More

Cathcart, Alan
Alan Cathcart

Senior Director
Alvarez & Marsal Taxand

Mr. Cathcart specializes in corporate and international tax, in particular cross-border mergers and acquisitions....  |  Read More

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