what is "base erosion" and what provisions has the U.S. enacted to mitigate it?

Expert Solution

Base erosion and profit shifting (BEPS) refers to corporate tax planning strategies used by multinationals to "shift" profits from higher-tax jurisdictions to lower-tax jurisdictions, thus "eroding" the "tax-base" of the higher-tax jurisdictions.

The Organisation for Economic Co-operation and Development (OECD) define BEPS strategies as also "exploiting gaps and mismatches in tax rules.

US proposed regulations

On 13 December 2018, the United States (US) Treasury Department (Treasury) and Internal Revenue Service (IRS) issued proposed regulations under Internal Revenue Code1 Section 59A (Proposed Regulations), providing guidance on the application of the base erosion and anti-abuse tax (BEAT). The Proposed Regulations include provisions addressing:

‌The identification of applicable taxpayers subject to the BEAT under the statutory aggregation rules
Application of the BEAT to partnerships and consolidated groups
‌Treatment of non-cash payments as base erosion payments
Application of various exceptions from base erosion payments in certain circumstances
Accounting for net operating loss (NOL) carryfowards when computing modified taxable income

ekkarill92 answered 1 year ago

Describe the term “BEPS – Base Erosion and Profit Shifting” in the context of multinational transfer...

Describe the term “BEPS – Base Erosion and Profit Shifting” in the context of multinational transfer pricing. The four common types of budgets that companies use are incremental, activity-based, value proposition and zero-based. Discuss how any one of the budgeting methods can be applied to the financial sector. Using examples, explain how performance indicators or measures would differ in assessing the performance of profit-seeking organisations versus not-for-profit organisations. What is integrated reporting and why does it matter? Discuss whether COVID-19...

During the global financial crisis, the U.S. enacted expansionary U.S. monetary policies that led to lower...

During the global financial crisis, the U.S. enacted expansionary U.S. monetary policies that led to lower interest rates in that country. Use the IS/LM/BP model to show the impact of the lower interest rates on foreign economies, and the choices that different exchange rate regimes (fixed vs. floating) presented them.

What is meant by a standalone principal? What are opportunity costs and erosion, and do they...

What is meant by a standalone principal? What are opportunity costs and erosion, and do they affect the process of determining a proposed investment’s incremental cash flows?

What does it mean to say a plaintive has a duty to mitigate damages in the...

What does it mean to say a plaintive has a duty to mitigate damages in the breach of contract case?

During the depression, the U.S central bank, the Federal Reserve, enacted policies that increased the money...

During the depression, the U.S central bank, the Federal Reserve, enacted policies that increased the money supply by 6% . 1). what happens to the level of output and the price level in the short run and in the long run. 2). Assume that the velocity is constant, what is the percentage change of output and price level in the short run and long run (Hint: use quantity theory of money). 3). What happens to unemployment in the short run...

How does the U.S. income tax treaty with Japan treat the FIRPTA provisions?

What is one way to mitigate unsystematic risks?

What is one way to mitigate unsystematic risks? Focus on one risk at a time. Diversify the investment portfolio. Transfer the risk to the internal auditors. Convert unsystematic risk into systematic risk. 、 How can a spontaneous asset account be distinguished from a nonspontaneous asset account? A nonspontaneous asset account balance typically decreases as sales increase. A spontaneous asset account balance typically increases as sales increase. A nonspontaneous asset account balance typically increases as sales increase. A spontaneous asset account balance typically decreases as sales increase. Which account type correlates with...

A 0.400 M solution of weak base has a pH of 9.85. What is the base...

A 0.400 M solution of weak base has a pH of 9.85. What is the base hydrolysis constant, Kb for the weak base?

What does the duty to mitigate require of an employee whose position has been constructively terminated?...

What does the duty to mitigate require of an employee whose position has been constructively terminated? A. It requires the former employee to take reasonable steps to find comparable employment. B. The employee could be required to accept a lower position in the same company. C. It requires the former employee to take the first job available. D. The individual is expected to accept a lower-level job in another company to reduce his loss.

A certain weak base has a Kb of 7.50 × 10-7. What concentration of this base...

A certain weak base has a Kb of 7.50 × 10-7. What concentration of this base will produce a pH of 10.02?

Question