Earnings Stripping under the BEAT

44 Pages Posted: 29 May 2019 Last revised: 10 Oct 2019

See all articles by Chris William Sanchirico

Chris William Sanchirico

University of Pennsylvania Law School; University of Pennsylvania Wharton School - Business Economics and Public Policy Department

Date Written: May 28, 2019

Abstract

The Base Erosion and Anti-Abuse Tax is generally regarded as among the most important changes wrought by the Tax Cuts and Jobs Act of 2017, which is itself regarded as among the most important pieces of tax legislation in the last several decades. This paper evaluates the new BEAT provision along with recently proposed regulations. The analysis makes several points about the nature of earnings stripping, the interaction of the BEAT with the new limitation on deducting business interest, the treatment of costs of goods sold under the BEAT, and the BEAT’s approach to depreciable and amortizable property whether purchased, leased or licensed.

Keywords: BEAT, Earnings stripping, Interest stripping, Base erosion, Base erosion anti-abuse tax, Business interest limitation, 163(j), inventoriable costs, capitalization, costs of goods sold

JEL Classification: H25, H26, H87, K34

Suggested Citation

Sanchirico, Chris William, Earnings Stripping under the BEAT (May 28, 2019). U of Penn, Inst for Law & Econ Research Paper No. 19-25; Tax Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3395416 or http://dx.doi.org/10.2139/ssrn.3395416

Chris William Sanchirico (Contact Author)

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-898-4220 (Phone)

HOME PAGE: http://www.law.upenn.edu/faculty/csanchir/

University of Pennsylvania Wharton School - Business Economics and Public Policy Department

3641 Locust Walk
Philadelphia, PA 19104-6372
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
84
Abstract Views
477
rank
298,769
PlumX Metrics