The Beat and Treaty Overrides: A Brief Response to Rosenbloom and Shaheen

In a recent paper posted on SSRN, Profs. David Rosenbloom and Fadi Shaheen argue that the Base Erosion Anti-Abuse Tax (BEAT) (IRC section 59A), as enacted in 2017, is a potential violation of Articles 23 and 24 of US tax treaties. In addition, they argue that the BEAT does not override those treaties and therefore the treaties can be relied upon to overcome the effects of the BEAT. In our opinion, this conclusion is wrong, for two reasons. First, we believe that the BEAT is not a treaty violation. Second, we believe that even if the BEAT were found to violate treaties, it is a treaty override.

Keywords: Section 59A, BEAT, Base Erosion Anti-Abuse Tax, Alternative Minimum Tax, Treaty Override

Suggested Citation: Suggested Citation

Wells, Bret and Avi-Yonah, Reuven S., The Beat and Treaty Overrides: A Brief Response to Rosenbloom and Shaheen (August 16, 2018). Tax Notes International, October 22, 2018, p. 383, U of Michigan Law & Econ Research Paper No. 18-019, U of Houston Law Center No. 2018-A10, U of Michigan Public Law Research Paper No. 617, Available at SSRN: https://ssrn.com/abstract=3232974 or http://dx.doi.org/10.2139/ssrn.3232974