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Two factors complicate the three- year- average- gross- receipts test: (1) The gross receipts of certain taxpayer groups must be aggregated and treated as gross receipts of one taxpayer, and (2) not all gross receipts of foreign entities count toward the $500 million BEAT trigger. The latter two conditions, however, require greater analysis. The first criterion exempts certain passthrough entities and is relatively easy to apply. 59A must be at least 3% (2% for certain banks and securities dealers). The taxpayer's "base erosion percentage" determined under Sec.The taxpayer must have average annual gross receipts of at least $500 million over the three-year period ending with the preceding tax year and.The taxpayer must be a corporation that is not a regulated investment company, a real estate investment trust, or an S corporation.To be subject to the BEAT in any tax year, corporate taxpayers must meet a three- part test: This discussion explores the threshold issue of which corporate taxpayers need to consider potential BEAT liability. 482 and making substantial payments to non- U.S. However, not all corporations governed by Sec. 482, the BEAT adds fresh complexity to the calculation of transfer- pricing tax and accounting results. Because these payments are also governed by the arm's- length principle of Sec.
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115- 97, imposes a base- erosion and anti- avoidance tax (BEAT) on certain corporations making payments to related foreign persons. 59A, enacted by the law known as the Tax Cuts and Jobs Act, P.L.