Beat It: Tax Reform and Tax Treaties

7 Pages Posted: 10 Jan 2018 Last revised: 22 Mar 2018

Date Written: January 4, 2018


The Tax Cuts and Jobs Act (TCJA) includes several provisions that may be viewed as potential violations of US tax treaties. However, most of those potential violations, such as new IRC section 951A and to a large extent new IRC section 59A, are covered by the Savings Clause (US model article 1(4)). The only remaining question is whether IRC section 59A (the “Base Erosion Anti-Abuse Tax”, or BEAT) violates the non-discrimination provision (article 24), which is exempted from the Savings Clause. The answer is no, because foreign related parties are not comparable to US related parties receiving interest or royalties.

Keywords: TCJA, tax reform, tax treaties

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S., Beat It: Tax Reform and Tax Treaties (January 4, 2018). U of Michigan Public Law Research Paper No. 587, U of Michigan Law & Econ Research Paper No. 18-003, Available at SSRN: or

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

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