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US Tax Reform: Updates to the BEAT regime

US Tax Reform: Updates to the BEAT regime

US publishes final BEAT regulations and proposes additional rules.


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On 2 December 2019 final regulations and related proposed regulations implementing the base erosion and anti-abuse tax (BEAT) provisions in the US were published. BEAT effectively applies a 10 percent minimum tax for taxable income adjusted for base erosion payments and takes effect from tax year 2018. The tax only affects businesses where US gross receipts are in excess of US$500 million (aggregated on a global group basis) and so has limited application for multinational groups without a significant US presence. In addition, costs of goods sold (COGS) are generally excluded from the definition of base erosion payments, and so for example a US business that imports product for manufacturing and/or resale is likely to be less effected than a company that pays for services.

KPMG in the US has prepared a report setting out early impressions and observations about these latest regulations.

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