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Instruksi untuk Formulir 8991, Pajak Pembayaran Erosion Dasar Pajak Dengan Penerimaan Kotor Substansial
Rev. Desember 2023
Formulir Terkait
- Bentuk 8991 - Tax on Base Erosion Pembayaran Pajak Dengan Penerimaan Kotor Substansial
Department of the Treasury
Internal Revenue Service
Instructions for Form 8991
(Rev. December 2023)
Tax on Base Erosion Payments of Taxpayers With Substantial Gross Receipts
Section references are to the Internal Revenue Code unless
otherwise noted.
General Instructions
Purpose of Form
Future Developments
For the latest information about developments related to Form
8991, its schedules, and its instructions, such as legislation
enacted or guidance published after the form and instructions
Use Form 8991 to determine a taxpayer’s base erosion minimum
tax amount for the year.
Use Schedule A to determine the amount of base erosion
payments and base erosion tax benefits for purposes of:
Determining the taxpayer’s base erosion percentage, and
Determining the applicable taxpayer’s modified taxable
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Background
income.
The Tax Cuts and Jobs Act of 2017 (P.L. 115-97) added new
section 59A (Tax on Base Erosion Payments of Taxpayers with
Substantial Gross Receipts), which applies to large corporations
that have the ability to reduce U.S. tax liabilities by making
deductible payments to foreign related parties. The Base
Erosion and Anti-Abuse Tax (BEAT) of section 59A is generally
levied on certain large corporations whose aggregate group
satisfies the "base erosion test" under Regulations section
1.59A-2(e), generally by having deductions with respect to
amounts paid or accrued to foreign related parties that are 3% or
higher of their total deductions (2% if any member of the
aggregate group is a member of an affiliated group that includes
a bank or registered security dealer). Large corporations are
those whose aggregate group satisfies the "gross receipts test"
of Regulations section 1.59A-2(d), generally by having gross
receipts of $500 million or more. The BEAT operates as a
minimum tax, so a taxpayer is only subject to additional tax
under the BEAT if the BEAT tax rate multiplied by the taxpayer's
modified taxable income exceeds the taxpayer's regular tax
liability adjusted for certain credits.
Use Schedule B to report the amount of deductions being
waived for the tax year.
Use Schedule C to determine the credits that reduce regular
tax liability in computing the base erosion minimum tax amount.
Definitions
Applicable taxpayer. An applicable taxpayer is, with respect to
any tax year, a taxpayer which meets all of the following criteria.
The taxpayer is a corporation other than a regulated
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investment company (RIC), a real estate investment trust (REIT),
or an S corporation.
The taxpayer's aggregate group (or if the taxpayer does not
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have an aggregate group, the taxpayer) satisfies the gross
receipts test, generally by having average annual gross receipts
for the 3-tax-year period ending with the preceding tax year that
are at least $500 million.
The taxpayer's aggregate group (or if the taxpayer does not
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have an aggregate group, the taxpayer) satisfies the base
erosion test, generally by having a base erosion percentage for
the tax year of 3% or higher; 2% or higher for a taxpayer who is a
member of an affiliated group that includes a bank (as defined in
section 581) or a registered securities dealer as defined in
Regulations section 1.59A-1(b)(15).
On December 6, 2019, the Treasury Department and the IRS
published final regulations (the “final regulations”) under sections
59A, 383, 1502, and 6038A, and proposed regulations which
propose other regulations under sections 59A and 6031 (the
“2019 proposed regulations”).
See Regulations section 1.59A-2 for more information on how
On October 9, 2020, the Treasury Department and the IRS
published final regulations (the “2020 final regulations”) providing
additional guidance under sections 59A, 1502, and 6031.
to determine whether a taxpayer is an applicable taxpayer.
Base erosion minimum tax amount. The base erosion
minimum tax amount for the tax year is the excess of 10% (5% in
the case of a tax year beginning in 2018) of the modified taxable
income of the applicable taxpayer for the tax year over the
applicable taxpayer’s regular tax liability under section 26(b),
reduced (but not below zero) by the excess, if any, of:
1. The credits allowed under chapter 1 of subtitle A of the
Code (“chapter 1”) against the applicable taxpayer’s regular tax
liability over
Reminders
Corrected Form 8991. If you file a Form 8991 that you later
determine is incomplete or incorrect, file a corrected Form 8991
with an amended tax return, using the amended return
instructions for the return with which you originally filed Form
8991. Write “Corrected” at the top of the form and attach a
statement identifying the changes.
2. The sum of:
Reporting requirements and penalties. P.L. 115-97 also
expanded the information reporting requirements under section
6038A and increased the amount of the penalty for failure to
furnish information or maintain records under section 6038A(d)
(1) and (2) from $10,000 to $25,000. See Form 5472,
its instructions for further details.
a. The credit allowed under section 38 which is properly
allocable to the research credit determined under section 41(a),
plus
b. The portion of the applicable section 38 credits not in
excess of 80% of the lesser of the amount of the applicable
section 38 credits or the base erosion minimum tax amount
determined without taking the applicable section 38 credits into
account, plus
c. Any credits allowed under sections 33, 37, and 53.
If the applicable taxpayer is a member of an affiliated group
under section 1504(a)(1) that includes a bank (as defined in
Dec 1, 2023
Cat. No. 71330Z
section 581) or a registered securities dealer (as defined in
Regulations section 1.59A-1(b)(15)), the tax rate in effect for the
tax year for the base erosion minimum tax amount is increased
by an additional 1%.
Effectively connected income and income taken into account
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in U.S. taxable income under an income tax treaty.
1. Amounts paid or accrued that are subject to U.S. federal
income taxation as income that is effectively connected to a U.S.
trade or business if the taxpayer receives a withholding
certificate with respect to the income.
See Regulations section 1.59A-5 for more information on how
to compute the base erosion minimum tax amount.
2. If the foreign related party determines its taxable income
applying the business profits provisions of an income tax treaty,
amounts paid or accrued to the foreign related party that are
taken into account in determining its taxable income.
Base erosion payment. A base erosion payment is any
amount paid or accrued by a taxpayer to a foreign person (as
defined in Regulations section 1.59A-1(b)(10)) that is a related
party (as defined in Regulations section 1.59A-1(b)(12)) with
respect to which a deduction is allowable under chapter 1.
The amount paid or accrued, and the identity of the payor and
recipient of the amount paid or accrued, is determined under
general tax principles.
An amount paid or accrued includes an amount paid or
accrued using any form of consideration, such as cash, property,
stock, a partnership interest, or the assumption of a liability.
Base erosion payments are generally determined on a gross
basis, unless the Code or regulations expressly permit netting of
amounts in determining payments.
Exchange loss from section 988 transactions.
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Certain deductions for amounts paid or accrued with respect
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to certain total loss absorbing capacity (TLAC) securities and
certain foreign TLAC securities.
Amounts transferred in connection with certain specified
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nonrecognition transactions. See Regulations section 1.59A-3(b)
(3)(viii) for more information.
Amounts paid by the taxpayer to a regulated foreign insurance
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company under a reinsurance contract for reinsurance losses
incurred or claims payments that are ultimately paid by the
foreign insurance company to an unrelated party.
See Regulations section 1.59A-3(b)(3)(i)–(ix) for further
information on whether a payment or accrual is not a base
erosion payment.
For purposes of determining whether a taxpayer has made a
base erosion payment, the taxpayer must treat a payment to or
from a partnership as made to or from each partner. See
Regulations section 1.59A-7 for more information on how the
BEAT applies to partners.
Related party. A related party is:
Any 25% owner of the taxpayer (as defined in Regulations
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Base erosion payments also include the following.
section 1.59A-1(b)(17)(ii)),
Amounts paid or accrued by a taxpayer to a foreign related
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Any person who is related (within the meaning of section
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party in connection with the acquisition of depreciable or
amortizable property.
267(b) or 707(b)(1)) to the taxpayer or any 25% owner of the
taxpayer, or
Premiums or other consideration paid or accrued by a
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A controlled taxpayer within the meaning of section 1.482-1(i)
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taxpayer to a foreign related party for reinsurance payments
which are taken into account under section 803(a)(1)(B) or
section 832(b)(4)(A).
(5) together with, or with respect to, the taxpayer.
Section 318, with certain modifications, applies in
determining whether a person is a related party. See Regulations
section 1.59A-1(b)(17)(iii) for additional rules relating to the
modification of section 318 for use in determining a person’s
relatedness.
Any amount paid or accrued by a taxpayer to a related party
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that is a surrogate foreign corporation (if that corporation first
became a surrogate foreign corporation after November 9,
2017), or a foreign person which is a member of the same
expanded affiliated group as the surrogate foreign corporation
(collectively, “expatriated entities”), which results in a reduction
to gross receipts. See section 59A(d)(4) for more information.
Base erosion tax benefit. Generally, a base erosion tax
benefit is any deduction that is allowed under chapter 1 for the
tax year for any base erosion payment. Base erosion tax benefits
also include any deductions allowed for the tax year for
depreciation or amortization with respect to the property
acquired with a base erosion payment (that are paid or accrued
in tax years beginning after 2017). Base erosion tax benefits also
include certain reductions in the gross amount of premiums and
other consideration on insurance and annuity contracts, or any
deduction from the amount of gross premiums written on
insurance contracts during the tax year for premiums paid for
reinsurance, and payments to certain expatriated entities (as
reduction in gross receipts in computing gross income of the
taxpayer for the tax year.
applicable in determining the amount of the base erosion tax
benefit when taxes have been imposed by section 871 or 881
and withheld under section 1441 or 1442 on a base erosion
payment; or when the taxpayer has made an interest payment
that gives rise to a base erosion tax benefit and section 163(j)
applies for the tax year.
See Regulations section 1.59A-3 for more information on the
definition of a base erosion payment.
Base erosion payments do not include the following types of
payments made to a foreign person that is a related party.
Amounts resulting in a reduction to determine gross income,
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such as cost of goods sold.
Amounts paid or accrued for services if such services are
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services that meet the requirements for eligibility for use of the
services cost method under section 482 (determined without
regard to the requirement that the services not contribute
significantly to the fundamental risks of business success or
failure), but only to the extent of the total services cost of those
services. The mark-up component paid or accrued to a foreign
related party is a base erosion payment.
Qualified derivative payments. A qualified derivative payment
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is a payment made by a taxpayer pursuant to a derivative with
respect to which the taxpayer (a) recognizes gain or loss as if the
derivative were sold for its fair market value on the last business
day of the tax year and any additional times required by the
taxpayer’s method of accounting, (b) treats the recognized gain
or loss as ordinary, and (c) treats the character of all payments
made with respect to the derivative as ordinary. A payment is not
a qualified derivative payment if the payment is properly
allocable to a non-derivative component of a contract or if the
payment would be treated as a base erosion payment if it were
not made pursuant to a derivative, such as an interest, royalty, or
services payment.
Base erosion percentage. The base erosion percentage of the
taxpayer's aggregate group (or if the taxpayer does not have an
aggregate group, the taxpayer) is determined by dividing:
1. The aggregate amount of base erosion tax benefits for the
tax year (numerator) by
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Instructions for Form 8991 (Rev. 12-2023)
2. The aggregate amount allowed deductions and base
erosion tax benefits (denominator). The denominator excludes
the following deductions.
the members of the aggregate group for the tax years that end
with or within the taxpayer's tax year.
See Regulations section 1.59A-2(c) for further information on
a. Any deduction allowed under sections 172, 245A, or 250.
how to apply the aggregation rules.
b. Any deduction for amounts paid or accrued for services to
which the exception under Regulations section 1.59A-3(b)(3)(i)
for the section 482 services cost method applies.
c. Any deduction for qualified derivative payments which are
not treated as base erosion payments as a result of Regulations
section 1.59A-3(b)(3)(ii).
d. Exchange loss from section 988 transactions that is not a
base erosion payment as a result of the exception under
Regulations section 1.59A-3(b)(3)(iv).
e. Any deduction for amounts paid or accrued to foreign
related parties with respect to TLAC securities and foreign TLAC
securities that are not treated as base erosion payments as a
result of Regulations section 1.59A-3(b)(3)(v).
Who Must File
Any corporation, other than a RIC, a REIT, or an S corporation,
that has (or is a member of an aggregate group that has) annual
gross receipts of at least $500 million in 1 or more of the 3
preceding tax years ending with the preceding tax year must file
Form 8991.
Instructions, later, to determine whether the corporation has
gross receipts of at least $500 million in 1 or more of the 3
preceding tax years.
See also questions/items and related instructions in the
following forms.
f. Any reinsurance losses incurred or claims payments that
are not treated as base erosion payments as a result of the
exception under Regulations section 1.59A-3(b)(3)(ix).
Question 22, Schedule K, Form 1120.
Item DD, Form 1120-F.
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Question 14, Schedule M, Form 1120-L.
Question 15, Schedule I, Form 1120-PC.
Question 16, Schedule K, Form 1120-C.
g. Any deduction not allowed in determining taxable income.
See Regulations section 1.59A-2(e)(3) for further information
on how to compute the base erosion percentage.
When To File
Attach Form 8991 to your income tax return (or, if applicable,
exempt organization business income tax return) and file by the
due date (including extensions) for that return.
Modified taxable income. Modified taxable income is the
applicable taxpayer’s taxable income plus any base erosion tax
benefit with respect to any base erosion payment and the base
erosion percentage of any net operating loss deduction allowed
under section 172 for the tax year.
Specific Instructions
See Regulations section 1.59A-4(b) for further information on
the computation of modified taxable income.
Note. Complete every applicable entry space on Form 8991. Do
not enter “See Attached” or “Available Upon Request” instead of
completing the entry spaces. If more space is needed on the
forms or schedules, attach separate sheets using the same size
and format as the printed forms.
Applicable section 38 credits. Applicable section 38 credits
are the credits allowed under section 38 for the tax year that are
properly allocable to:
The low-income housing credit determined under section
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If there are supporting statements and attachments, arrange
them in the same order as the schedules or forms they support
and attach them last. Show the totals on the printed forms. Enter
the filer’s name and EIN on each supporting statement or
attachment.
42(a);
The renewable electricity production credit determined under
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section 45(a); and
The investment credit determined under section 46, but only
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to the extent properly allocable to the energy credit determined
under section 48.
Part I—Applicable Taxpayer
Aggregation rules. When applying the gross receipts test and
base erosion percentage test, a taxpayer that is a member of an
aggregate group determines its gross receipts and base erosion
percentage as if it were 1 person, on the basis of its aggregate
group. A taxpayer is a member of an aggregate group if it
belongs to a controlled group of corporations. The term
“controlled group of corporations” has the meaning given by
section 1563(a) except that:
Average Annual Gross Receipts for the
3-Tax-Year Period Ending With the Preceding
Tax Year
earlier, and is filing Form 8991 should complete lines 1a through
1g to determine their average annual gross receipts for the
3-tax-year period ending with the preceding tax year.
1. “More than 50%” is substituted for “at least 80%” each
For purposes of determining average annual gross receipts, a
foreign corporation's gross receipts are included only when such
gross receipts are taken into account when determining the
foreign corporation's income effectively connected with a U.S.
trade or business (“ECI”). If the foreign corporation is subject to
tax on a net basis pursuant to a U.S. income tax treaty, only
gross receipts that are attributable to transactions taken into
account in determining the foreign corporation's net taxable
income are included in the gross receipts determination.
place it appears in section 1563(a), and
2. The determination of the controlled group of corporations
is made without regard to sections 1563(a)(4) and (e)(3)(C).
Foreign corporations are excluded from an aggregate group
except to the extent the foreign corporation has income
effectively connected with the conduct of a trade or business in
the United States or income taken into account in determining
net taxable income using an income tax treaty.
An aggregate group is determined for each taxpayer. A
taxpayer that is a member of an aggregate group determines its
gross receipts and base erosion percentage on the basis of its
aggregate group by taking into account the gross receipts, base
erosion payments, base erosion tax benefits, and deductions of
Line 1a. Enter in column (a) your gross receipts for the first
preceding tax year. Enter in column (b) your gross receipts for
the second preceding tax year. Enter in column (c) your gross
receipts for the third preceding tax year.
Only include the gross receipts of the filer on line 1a. Do not
include on this line the gross receipts of all other persons treated
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Instructions for Form 8991 (Rev. 12-2023)
as 1 person under the aggregation rules of Regulations section
1.59A-2(c) which should be reported on line 1c. See the
Line 2d. Enter the aggregate amount paid or accrued with
respect to expatriated entities that results in a reduction of the
gross receipts of the taxpayer.
Line 1b. Enter in column (a) gross receipts from partnerships
for the first preceding tax year. Enter in column (b) gross receipts
from partnerships for the second preceding tax year. Enter in
column (c) gross receipts from partnerships for the third
preceding tax year.
A filer must report total ECI gross receipts from Schedule K-3
(Form 1065), Part IX, Section 1, lines 2–4, column (b), received
from partnerships in which the taxpayer holds partnership
interests.
Line 2f. Enter the amount from Schedule A, line 5b.
Line 2g. Enter the amount from Schedule A, line 9b.
Line 2h. Enter the aggregate amount of deductions allowed
under sections 172, 245A, and 250.
Line 2i. If an election is made to waive deductions in
accordance with Regulations section 1.59A-3(c)(6)(i); check the
“Yes” box on line 2i; complete Schedule B, Waiver of Deductions;
and enter the amount from line 15 of Schedule B. If the taxpayer
is a member of an aggregate group, and another member of the
aggregate group has also made the election to waive deductions
as described above, also include the amount of the member's
Line 1c. Enter in column (a) gross receipts of all other persons
treated as 1 person under the aggregation rules of Regulations
section 1.59A-2(c) (the “aggregate gross receipts”) for the first
preceding tax year. Enter in column (b) the aggregate gross
receipts for the second preceding tax year. Enter in column (c)
the aggregate gross receipts for the third preceding tax year. Do
not include on line 1c gross receipts that have already been
included on line 1a.
Line 2j. Enter the aggregate amount of deductions for exchange
losses from section 988 transactions described in Regulations
section 1.59A-2(e)(3)(ii)(D).
Line 2k. Enter the aggregate amount of deductions for TLAC
securities and foreign TLAC securities described in Regulations
section 1.59A-2(e)(3)(ii)(E).
Line 1f. If the taxpayer was not in existence for the entire 3-year
period referenced in columns (a), (b), and (c), the taxpayer must
determine a gross receipts average for the period that it was in
existence (which includes the current year's gross receipts). See
Regulations section 1.59A-2(d)(2) for further information.
Line 2l. Enter the aggregate amount of reinsurance losses
incurred and claims payments described in Regulations section
1.59A-2(e)(3)(ii)(F).
Line 1g. If you check “No” on line 1g, you are not subject to the
section 59A tax on base erosion payments of taxpayers with
substantial gross receipts. Do not complete the remaining lines.
Attach Form 8991 to your tax return.
Line 2p. If you check “No” for line 2p, you are not subject to the
tax on base erosion payments of taxpayers with substantial
gross receipts. Skip Parts II-IV. Complete Part V and Schedule A.
Complete Schedule B if necessary. Do not complete
If you check “Yes” on line 1g, continue to line 2a.
Schedule C. Attach Form 8991 and the completed Schedule A
(and, if applicable, Schedule B) to your tax return.
Base Erosion Percentage for the Tax Year
If you check “Yes” for line 2p, continue to Part II.
Complete lines 2a through 2o to determine your base erosion
percentage for the tax year. See the definition of aggregation
rules, earlier, for information on how to determine the base
erosion percentage for an aggregate group. If the taxpayer is not
a member of an aggregate group, the taxpayer should enter its
own amounts in lines 2a through 2o.
Part II—Modified Taxable Income
See Regulations section 1.59A-4 for further details on how to
determine modified taxable income.
Line 3a. Enter the amount of taxable income after any net
operating loss.
A taxpayer is subject to the 2% base erosion percentage
threshold if it or any member of its aggregate group is a member
of an affiliated group (as defined in section 1504(a)(1)) that
includes a bank (as defined in section 581) or a registered
securities dealer (as defined in Regulations section 1.59A-1(b)
(15)).
If the current year reports a loss, without any net operating
loss carryovers, the amount entered here may be less than zero.
If the current year reports taxable income and there is a net
operating loss carryover that would reduce taxable income
below zero, enter “-0-.” Do not enter an amount less than zero.
Line 2a. Enter the amount of base erosion tax benefits from
Line 3b. Enter the amount of base erosion tax benefits for the
tax year with respect to base erosion payments from
Schedule A, line 15, column (b-2).
Schedule A, line 15, column (a-2).
Line 2b. Enter the aggregate amount of deductions allowed
under chapter 1 (sections 1 through 1400) for the tax year. The
amount entered should be the aggregate deductions allowed to
all persons that are treated as 1 person under the aggregation
rules. Do not include amounts reported on line 2c (reinsurance
payments) or amounts reported on line 2d (payments to
expatriated entities).
Line 3c. Enter the amount of net operating loss deduction to be
added back to taxable income for purposes of determining
modified taxable income. To calculate this amount, first
determine the amount of net operating loss deduction allowed
under section 172 that does not exceed taxable income before
taking into account the net operating loss deduction for all
applicable tax years. Second, multiply this net operating loss
deduction by the base erosion percentage for the tax year in
which the net operating loss arose. If the net operating loss
deduction is attributable to net operating losses that arose in
more than one tax year, multiply the net operating loss
attributable to each tax year by the base erosion percentage for
that tax year and determine the total amount by adding the result
from each tax year. For any tax year beginning before 2018, the
base erosion percentage is zero.
Line 2c. For reinsurance payments paid or accrued that are
base erosion payments described in Regulations section
1.59A-3(b)(1)(iii), enter the aggregate amount of:
Any reduction under section 803(a)(1)(B) in the gross amount
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of premiums and other consideration on insurance and annuity
contracts for premiums and other consideration arising out of
indemnity insurance, and
Any deduction under section 832(b)(4)(A) from the amount of
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gross premiums written on insurance contracts during the tax
year for premiums paid for reinsurance.
Line 3d. Combine the amounts on lines 3a through 3c.
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Instructions for Form 8991 (Rev. 12-2023)
Part III—Regular Tax Liability
Schedule A—Base Erosion Payments
and Base Erosion Tax Benefits
Adjusted for Purposes of Computing
Base Erosion Minimum Tax Amount
Schedule A is required to be attached if a corporation has
average annual gross receipts of $500 million or more for the
3-tax-year period ending with the preceding tax year. This
schedule requires a taxpayer to report all amounts that are base
erosion payments as defined in Regulations section 1.59A-3(b)
and base erosion tax benefits as defined in Regulations section
1.59A-3(c). This schedule also requires a taxpayer to report any
amounts that qualify for certain exceptions applicable to
amounts that are not treated as base erosion payments.
Line 4a. Enter the amount of regular tax liability (as defined in
section 26(b)) of the applicable taxpayer for the tax year.
Consolidated groups. Affiliated groups of corporations filing
consolidated returns, please review any additional information at
Line 4c. Subtract line 4b from 4a. If zero or less, enter “-0-.”
Part IV—Computation of Base
Erosion Minimum Tax Amount
For lines 3 through 11, complete columns (a-1), (a-2), (b-1),
and (b-2) for each type of payment made by the taxpayer (or,
where applicable, member of the taxpayer's aggregate group) to
a foreign related party of the taxpayer during the tax year. For
each type of payment reported on lines 3 through 11 of column
(a-1), check all applicable boxes in columns (c), (d), and (e) to
indicate the type of related party who received the base erosion
payment from the taxpayer.
Line 5b. Enter the applicable tax rate for the tax year. For tax
years beginning during 2018, the applicable rate is 5%. For tax
years beginning and ending during 2019 through 2025, the
applicable rate is 10%. For any tax year that includes January 1,
2026, the applicable rate is 12.5%.
Consolidated groups. Affiliated groups of corporations filing
consolidated returns, please review any additional information at
The rates above are increased by 1% if the applicable
taxpayer is a member of an affiliated group (as defined in section
1504(a)(1)) that includes either a bank (as defined in section
581), or a registered securities dealer (as defined in Regulations
section 1.59A-1(b)(15)).
Columns (a-1) and (a-2). Columns (a-1) and (a-2) are used to
determine the base erosion percentage, as defined in
Regulations section 1.59A-2(e). Enter in columns (a-1) and (a-2)
the amount of aggregate base erosion payments and aggregate
base erosion tax benefits, respectively, that correspond to each
type of base erosion payment specified on lines 3 through 11.
The aggregate base erosion payment entered in these lines
should include only those base erosion payments paid or
accrued in the current year. The aggregate base erosion tax
benefit entered in these lines should only include those base
erosion tax benefits allowed in the current year, which may relate
to a base erosion payment paid or accrued in the current year or
a prior year. The aggregate base erosion tax benefits in column
(a-2), lines 3 through 11, should be the amounts determined
before applying the exception in Regulations section 1.59A-3(c)
(3) (base erosion tax benefits disregarded if tax withheld on base
erosion payment).
Aggregate base erosion payments include the base erosion
payments of all persons treated as 1 person pursuant to the
earlier). Similarly, aggregate base erosion tax benefits include
the base erosion tax benefits of all persons treated as 1 person
pursuant to the aggregation rules.
Line 5e. Subtract line 5d from line 5c. If zero or less, enter “-0-.”
This is your base erosion minimum tax amount. For an
applicable taxpayer filing Form 1120, enter this amount on
Schedule J, line 3. For an applicable taxpayer filing Form 1120-F,
enter this amount on Section II, Schedule J, line 3. For an
applicable taxpayer filing Form 1120-L, enter this amount on
Schedule K, line 3. For an applicable taxpayer filing Form
1120-PC, enter this amount on page 1, line 6.
Part V—Additional Questions
Line 6. If the taxpayer is electing to use financial statements per
Regulations section 1.59A-3(b)(4)(i)(D) for purposes of
calculating interest expense allocable to a foreign corporation's
effectively connected income, check “Yes”; otherwise, check
“No.”
Line 7. Indicate if in the current year, the taxpayer capitalized to
inventory, or included in cost of goods sold (COGS), any cost
incurred for any payment to a related foreign party that the
taxpayer treated as a deduction in any prior tax year starting on
or after January 1, 2018. If the answer is yes, check “Yes” and
complete line 8.
However, if the taxpayer is not a member of an aggregate
group, the taxpayer will enter in columns (a-1) and (a-2) the
amount of its own base erosion payments and base erosion tax
benefits, respectively, that correspond to each type of base
erosion payment specified on lines 3 through 11, determined
before applying the exception in Regulations section 1.59A-3(c)
(3).
Line 8, column (i). Indicate the amount capitalized or included
in COGS for the current year.
Line 8, column (ii). Indicate a detailed description of the
item(s) capitalized or included in COGS such as sales-based
royalties, production-based royalties, trademarks, tradenames,
section 482 adjustments, transportation costs, etc.
Columns (b-1) and (b-2). Columns (b-1) and (b-2) are used to
determine modified taxable income, as described in Regulations
section 1.59A-4, of the applicable taxpayer. Enter in columns
(b-1) and (b-2) the amount of base erosion payments and base
erosion tax benefits, respectively, that correspond to the type of
base erosion payments specified in lines 3 through 11. Enter in
these columns the applicable taxpayer’s own base erosion
payments and base erosion tax benefits, without applying the
aggregation rules. The base erosion tax benefit in column (b-2),
lines 3 through 11, should be an amount determined before
applying the exception in Regulations section 1.59A-3(c)(3) (tax
benefits disregarded if tax withheld on base erosion payment).
Line 8, column (iii). Indicate the line item(s) where the
deduction was claimed on a prior year return, for example,
line 26, 27, or other line(s) on Form 1120-F, Form 1120, etc.
Line 8, column (iv). If an accounting method change was filed
on Form 3115 regarding items in column (i), indicate the tax year
in which the filing(s) was made. If no Form 3115 was filed,
indicate in an attachment the reason(s) why. Attach additional
sheets, if necessary, to report multiple row items starting with d,
e, etc.
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Instructions for Form 8991 (Rev. 12-2023)
paid or accrued to a foreign related party for the purchase of
tangible personal property.
Line 1 and line 2. These lines are reserved and should not be
used at this time.
Line 8, columns (a-1) and (b-1). Enter the amount of any
premiums or other consideration paid or accrued to a foreign
related party for insurance and reinsurance that are taken into
account under section 803(a)(1)(B) (relating to return premiums
and premiums or other consideration arising out of indemnity
reinsurance that reduces life insurance gross income) or section
832(b)(4)(A) (relating to amounts deducted from gross premiums
written on insurance contracts for return premiums and
premiums paid for reinsurance). See Regulations section
1.59A-3(b)(1)(iii).
Line 3, columns (a-1) and (b-1). Enter the amount paid or
accrued to a foreign related party in connection with the
acquisition or creation of intangible property rights (patents,
copyrights, trademarks, trade secrets, etc.) that is subject to the
allowance for depreciation (or amortization in lieu of
depreciation).
Line 3, columns (a-2) and (b-2). Enter the amount of
deductions allowed under chapter 1 for the tax year for
depreciation (or amortization in lieu of depreciation) with respect
to intangible property rights acquired in the current or prior years
from a foreign related party.
Line 8, columns (a-2) and (b-2). Enter the amount of any
reduction under section 803(a)(1)(B) in gross premiums and
other consideration on insurance and annuity contracts for
premiums and other consideration arising out of indemnity
insurance paid to a foreign related party, and the amount of any
deduction under section 832(b)(4)(A) from the amount of gross
premiums written on insurance contracts during the tax year for
premiums paid to a foreign related party for reinsurance.
Line 4, columns (a-1) and (b-1). Enter the amount paid or
accrued to a foreign related party for the use or right to use
tangible or intangible property resulting in rents, royalties, and/or
license fees.
Line 4, columns (a-2) and (b-2). Enter the amount of
deductions allowed under chapter 1 for the tax year for amounts
paid or accrued to a foreign related party for the use or right to
use tangible or intangible property that results in rents, royalties,
and/or license fees.
Line 9a, columns (a-1) and (b-1). Enter the amount paid or
accrued to a foreign related party with respect to any derivative
contract that is not a qualified derivative payment as defined in
Regulations section 1.59A-6. Do not include any amount paid
that is a qualified derivative payment.
Line 5a, columns (a-1) and (b-1). Enter the amount paid or
accrued to a foreign related party as compensation or
consideration for services, but excluding any amount that falls
within the exception in Regulations section 1.59A-3(b)(3)(i).
Enter amounts paid or accrued in excess of the total services
cost of the services eligible for the services cost method
exception (or the mark-up component). Also, enter amounts paid
or accrued for services ineligible for the services cost method
exception.
Line 9a, columns (a-2) and (b-2). Enter the amount of
deductions allowed under chapter 1 for the tax year for amounts
paid or accrued to a foreign related party with respect to any
payment that is not a qualified derivative payment. Do not
include any deductions allowed under chapter 1 for the tax year
if the deductible amount is a qualified derivative payment.
Line 9b. Enter the amount paid to a foreign related party that is
a qualified derivative payment excepted by Regulations section
1.59A-6(b). Determine the amount of the qualified derivative
payments after applying the aggregation rules. Generally, a
qualified derivative payment is any payment made by the
taxpayer pursuant to a derivative contract provided that the
taxpayer recognizes gain or loss on the derivative contract as if it
were sold for its fair market value on the last business day of the
tax year; treats the gain or loss as ordinary; and treats the
character of all other items of income, deduction, gain, or loss
with respect to a payment pursuant to the derivative as ordinary.
A payment is not a qualified derivative payment if the payment
would be treated as a base erosion payment if it were not made
pursuant to a derivative (such as interest, royalty, or services
income). With respect to a contract with both derivative and
non-derivative components, a payment is not a qualified
derivative payment if it is properly allocable to the non-derivative
component.
A taxpayer meets the reporting requirement of Regulations
sections 1.59A-6(b)(2) and 1.6038A-2(b)(7)(ix) by entering the
amount on line 9b. Pursuant to Notice 2022-30, for tax years
beginning on or after January 1, 2025, a taxpayer will also need
to provide a representation that all payments satisfy the
requirements of Regulations section 1.59A-6(b)(2) and meet the
reporting requirement of Regulations sections 1.59A-6(b)(2) and
1.6038A-2(b)(7)(ix).
Line 5a, columns (a-2) and (b-2). Enter the amount of
deductions allowed under chapter 1 for the tax year for amounts
paid or accrued to a foreign related party as compensation or
consideration for services, but excluding any deduction for
amounts paid or accrued that fall within the exception in
Regulations section 1.59A-3(b)(3)(i). Enter amounts of
deductions allowed under chapter 1 for the tax year for amounts
paid or accrued in excess of the total services cost of the
services eligible for the services cost method exception (or the
mark-up component). Also, enter amounts of deductions for
services ineligible for the services cost method exception.
Line 5b. Enter the amount paid or accrued to a foreign related
party as compensation or consideration for services that are
defined under the exception in Regulations section 1.59A-3(b)(3)
(i). Determine the amount of compensation or consideration
eligible for this exception after applying the aggregation rules.
Line 6, columns (a-1) and (b-1). Enter the amount of all
interest paid or accrued to a foreign related party with respect to
which a deduction is allowable in the tax year.
Line 6, columns (a-2) and (b-2). Enter the amount of
deductible interest expense allowed under chapter 1 for the tax
year with respect to amounts paid or accrued to a foreign related
party. For purposes of completing line 6, columns (a-2) and
(b-2), any reduction in the amount of interest for which a
deduction is allowed for the tax year under section 163(j) is
treated as allocable first to interest paid or accrued to persons
who are not related parties with respect to the taxpayer and then
to such related parties.
Line 10, columns (a-1) and (b-1). Enter the amount paid or
accrued to certain expatriated entities that results in a reduction
of the gross receipts of the taxpayer. This amount includes
payments to a surrogate foreign corporation that is a related
party, but only if the entity first became a surrogate foreign
corporation after November 9, 2017. The amount also includes
payments to a foreign person that is a member of the same
expanded affiliated group, as defined in section 7874(c)(1), as
the surrogate foreign corporation. A surrogate foreign
Line 7, columns (a-1) and (b-1). Enter the amount paid or
accrued to a foreign related party for the purchase of tangible
personal property.
Line 7, columns (a-2) and (b-2). Enter the amount of
deductions allowed under chapter 1 for the tax year for amounts
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Instructions for Form 8991 (Rev. 12-2023)
corporation is defined in section 7874(a)(2)(B), but does not
include a foreign corporation that is treated as a domestic
corporation under section 7874(b).
party. Only include those amounts that have not otherwise been
included in Schedule A on lines 3 through 10.
Attach a statement for line 11. For amounts reported on
line 11, attach a statement describing the type and amount of
other payments, using the same column headings as specified in
Schedule A: “Aggregate Group's Base Erosion Payments,”
“Aggregate Group's Base Erosion Tax Benefits,” “Taxpayer's
Base Erosion Payments,” and “Taxpayer's Base Erosion Tax
Benefits.” For each type of payment, the attachment must
identify the relationship of the recipients consistent with the
categories and instructions for columns (c), (d), and (e) of
Schedule A.
Line 10, columns (a-2) and (b-2). Enter the amount of the
reduction to gross receipts with respect to payments to
expatriated entities that were used to compute gross income for
the tax year.
Line 11, columns (a-1) and (b-1). Enter the total amount of
any other base erosion payments that were paid or accrued to a
foreign related party and for which a deduction is allowable
under chapter 1. Only include those amounts that have not
otherwise been included in Schedule A on lines 3 through 10.
Line 12. For columns (a-1), (a-2), (b-1), and (b-2), add lines 3
Line 11, columns (a-2) and (b-2). Enter the amount of
deductions allowed under chapter 1 for the tax year for other
base erosion payments paid or accrued to a foreign related
through 11 and enter the total amount.
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Instructions for Form 8991 (Rev. 12-2023)
Worksheet for Schedule A, Line 14
A
B
C
D
E
Type of base erosion payment
Amount of base erosion tax
benefit
Treaty-reduced withholding rate Divide column C by 30% (0.30) Multiply column B by column D
(round to four decimal places)
%
%
%
%
%
Add the amounts in column E and enter the total on the appropriate line on Schedule A, line 14.
respect to which tax is deducted and withheld at a reduced
withholding rate pursuant to a U.S. income tax treaty.
Line 13. Enter the aggregate amount of base erosion tax
benefits from columns (a-2) and (b-2) of lines 3 through 11 on
which tax is imposed under section 871(a) or section 881, and
with respect to which tax has been deducted and withheld under
section 1442 at a 30% rate.
Column C. Enter the treaty-reduced withholding tax rate to
which the base erosion tax benefit is subject.
Column D. Divide the tax rate in column C by 30% (0.30).
Line 14. Complete the worksheet above to determine the
portion of the base erosion tax benefits from lines 3 through 11
on which tax is imposed under section 871 or section 881, and
with respect to which tax has been deducted and withheld at a
reduced withholding rate (but not exempt from tax) pursuant to a
U.S. income tax treaty. The amount to be entered on line 14 is
the same proportion of such base erosion tax benefits as the
reduced rate of tax specified by the relevant treaty bears to the
rate of tax imposed without regard to the treaty. Complete a
separate worksheet for column (a-2) amounts and column (b-2)
amounts on line 14, as necessary. Keep a copy of the completed
worksheet for your records.
Round to four decimal places.
Column E. Multiply the amount in column B by column D. The
amount is the portion of base erosion tax benefits with respect to
the specific type of base erosion payment and the specific
treaty-reduced rate of withholding that is not taken into account
in computing modified taxable income. Add the amounts in
column E and enter the total on Schedule A, line 14, column
(a-2) or (b-2).
Schedule B—Waiver of Deductions
Schedule B is used to report all the deductions being waived for
the tax year in accordance with Regulations section 1.59A-3(c)
(6)(i). Columns (a) through (i) are to be completed for each item
or property of which a deduction related to such item or property
is being waived.
Line 15. Subtract the sum of line 13 and line 14 from line 12,
and enter the amount on line 15. Line 15, column (a-2), is the
total amount of aggregate base erosion tax benefits for the tax
year that is used for purposes of determining the taxpayer's base
erosion percentage. Line 15, column (b-2), is the total amount of
base erosion tax benefits for the tax year that is used for
purposes of determining the taxpayer's modified taxable income.
Line 15, column (b-2), is also the total amount of base erosion
tax benefits for the tax year that is used for purposes of
determining the taxpayer's base erosion percentage when the
taxpayer is not a member of an aggregate group.
You should use lines 1 through 13 to report only your
own deductions that you are electing to waive. If a
!
CAUTION
member or members of your aggregate group has also
elected to waive any of its deductions, complete a separate
attachment for each member of the aggregate group that is
waiving deductions which contains the name and EIN of the
aggregate group member and the information shown in columns
(a) through (i). Attach each attachment to Schedule B. Include
the total amount of the deductions being claimed by all of your
aggregate group members with respect to the items or property
that their respective waiver elections relate to on line 14, column
(h) and the total of all of the deductions being waived by the
later.
Instructions for Worksheet for Schedule A,
Line 14, Columns (a-2) and (b-2)
General
Use a separate row for each type of base erosion payment and
each treaty-reduced withholding tax rate to which the
corresponding base erosion tax benefit is subject.
Column (a). Enter a brief description of the item or property to
which the deduction relates to; for example, debt instrument,
intangible property (such as patent, trademark, or license),
personal property, real property, etc.
Do not include a base erosion tax benefit that is subject to the
30% statutory withholding tax rate or a base erosion tax benefit
that is exempt from tax pursuant to relevant income tax treaty
provisions.
Column (b). Enter the date on which, or the time period which
the waived deduction was paid or accrued.
Column (c). Enter the provision of the Code (and regulations,
as applicable) that allows the deduction for the item or property
to which the election relates.
Do not combine the base erosion tax benefits that are subject
to different withholding rates. Do not enter any blended
withholding tax rates.
Column (d). Enter the schedule and line number of the
controlled group's federal income tax return where the deduction
is reflected (or would have been reflected).
Column A. Enter the type of base erosion payment that
corresponds to the type of base erosion payment in Schedule A.
Column B. Enter the amount of base erosion tax benefits that
correspond to the specific type of base erosion payment on
which tax is imposed under section 871 or section 881, and with
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Instructions for Form 8991 (Rev. 12-2023)
the earliest earned credits first. Therefore, the order in which the
credits are used in any tax year is:
Column (e). Enter the name of the foreign related party that is
or will be the recipient of the payment that generates the
deduction.
Carryforwards to that year, the earliest ones first;
The general business credit earned in that year; and
The carryback to that year.
•
•
•
Column (f). Enter the tax identification number of the foreign
related party payee that was entered in column (e). This can be
an EIN, ITIN, or Foreign Tax Identification Number (FTIN).
If your general business credits exceed your tax liability limit,
the credits are used in the order as they are listed in section
38(b). Although general business credits are aggregated on
Form 3800, you should have a separate record of each credit.
Column (g). Enter the country of organization of the foreign
related party that was entered in column (e).
Column (h). For each item or property reported under columns
(a) through (g), enter the amount of the deduction claimed on the
tax return (after the waiver indicated in column (i)).
Line 5. Section 59A(b)(1)(B)(ii)(II) limits the allowable
adjustment for applicable section 38 credits to 80% of the lesser
of applicable section 38 credits or the BEMTA computed without
the adjustment for applicable section 38 credits computed in Part
III.
Column (i). For each item or property reported under columns
(a) through (g), enter the amount of the deduction being waived.
Line 14. If additional space is necessary, complete and attach a
separate worksheet with the same information as shown under
columns (a) through (i) for each additional item or property. Enter
the total of deductions claimed for the tax year on line 14,
column (h) and the total of deductions waived on line 14, column
(i).
Also include on this line the total of deductions being claimed
(column (h)) and waived (column (i)) from other taxpayers that
are members of your aggregate group, if applicable.
Part II—Applicable Section 38 Credits
Line 8. Enter the total amount of low-income housing credit
shown on Form 3800, Part III, line 4d, columns (e) and (f); and
Part IV, line 2b, column (f) and line 4d, columns (e) and (f). This
total equals the available credit for low-income housing in the tax
year.
Line 9. Enter the total amount of section 45 credit shown on
Form 3800, Part III, line 1f (combine columns (e), (f), and (g));
Part III, line 4e (combine columns (e), (f), and (g)); Part IV, line 1f,
columns (e) and (f); and Part IV, line 4e, columns (e) and (f). This
total equals the available credit for renewable electricity
production in the tax year.
Schedule C—Credits Reducing
Regular Tax Liability in Computing
Base Erosion Minimum Tax Amount
(BEMTA)
Line 10. Enter only the total amount of investment credit
allocable to the section 48 energy credit shown on Form 3800,
Part III, line 4a (combine columns (e), (f), and (g)); and Part IV,
line 4a, columns (e) and (f). This total equals the available
investment credit properly allocable to the energy credit in the
tax year.
Part I—Credits Allowed Against Regular Tax
Line 1. You must enter the total credits allowed against your
regular tax liability in the tax year, except for credits allowed
under sections 33, 37, and 53. Total credits include the sum of all
credits shown on Form 1120 or other applicable return.
Line 11. Enter only that portion of the available applicable
credits which was included on Form 3800, Part II, line 38, and
used against regular tax liability. This represents the amount of
applicable credits allowed against regular tax liability in the
current year. Refer to the ordering rules described in the earlier
Line 2. Enter the total amount of credit for increasing research
activities reported on Form 3800, Part III, line 1c, columns (e)
and (f), plus Part IV, line 1c, columns (e) and (f). This total equals
the available credit for increasing research activities in the tax
year.
Part III—BEMTA Determined Without Adjustment
for Applicable Section 38 Credits
Line 15. Subtract line 14 from line 13. If zero or less, enter “-0-.”
Line 16. You must compute the BEMTA without adjustment for
applicable section 38 credits to allow computation of the
limitation of applicable section 38 credits on lines 4 and 5 of Part
I.
Line 3. Enter only that portion of the available credit for
increasing research activities which was included on Form 3800,
Part II, line 38, and used against regular tax liability. You must
apply the general rules and the ordering rules for use of general
business credits from the Instructions for Form 3800. The
Instructions for Form 3800 provide that credits reported on Form
3800 are treated as used on a first-in, first-out basis by offsetting
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The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for business
taxpayers filing this form is approved under OMB control number 1545-0123 and is included in the estimates shown in the instructions
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Instructions for Form 8991 (Rev. 12-2023)