Daily Tax Report: International

U.S. Companies Get Deduction Benefit in Base-Erosion Tax Rules (1)

Dec. 2, 2019, 11:32 PMUpdated: Dec. 3, 2019, 12:00 AM

U.S. multinationals may be able to forgo certain tax deductions to reduce their liabilities under an international tax on their offshore payments.

The Internal Revenue Service, in proposed rules (REG-112607-19) released Dec. 2, offered companies the chance to elect out of any amount of a deduction to reduce their base-erosion benefits. But that would mean they waive the deductions for all tax purposes.

The BEAT, under tax code Section 59A, is meant to discourage U.S. companies from shifting profits offshore through excessive deductible payments. Multinationals get slapped with a 10% tax when more than 3% of...

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