We got the BEAT: US Tax Reform Regulations

Doug McHoney (PwC's US International Tax Services Leader) and Nita Asher (an International Tax Partner in PwC's Washington National Tax Services practice) discuss the background to, and recent guidance for the Base Erosion and Anti-abuse Tax (BEAT). Doug and Nita discuss Nita's work at the Joint Committee of Taxation during the formation and passage of the Tax Cuts and Jobs Act; the history and reasoning behind the BEAT; how the BEAT compares with the previously-proposed 'Border-Adjustment Tax,' or 'BAT'; how the recently-released final BEAT regulations treat GILTI, subpart F, and PFIC inclusions; how the recent final regulations treat 'netting'; how the recently proposed BEAT regulations permit taxpayers to voluntarily forego deductions and how they can retroactively apply this election; how the onshoring of intellectual property (IP) may affect taxpayers's BEAT computations; and how taxpayers may use distributions or other structuring decisions to mitigate BEAT implications from onshoring IP.