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Instructions for Form 8991

(Rev. December 2024)
Tax on Base Erosion Payments of Taxpayers With Substantial Gross Receipts

Section references are to the Internal Revenue Code unless Information Return of a 25% Foreign-Owned U.S. Corporation or
otherwise noted. a Foreign Corporation Engaged in a U.S. Trade or Business, and
its instructions for further details.
Future Developments Expenditures charged to capital account. Any expenditure
made by a taxpayer to a foreign related party that is charged to
For the latest information about developments related to Form capital account and amortized or deducted, including under
8991, its schedules, and its instructions, such as legislation section 174, is a base erosion payment.
enacted or guidance published after the form and instructions
were issued, go to IRS.gov/Form8991.
General Instructions
Background
The Tax Cuts and Jobs Act of 2017 (P.L. 115-97) added new Purpose of Form
section 59A (Tax on Base Erosion Payments of Taxpayers with Use Form 8991 to determine a taxpayer’s base erosion minimum
Substantial Gross Receipts), which applies to large corporations tax amount for the year.
that have the ability to reduce U.S. tax liabilities by making
deductible payments to foreign related parties. The Base Use Schedule A to determine the amount of base erosion
Erosion and Anti-Abuse Tax (BEAT) of section 59A is generally payments and base erosion tax benefits for purposes of:
levied on certain large corporations whose aggregate group • Determining the taxpayer’s base erosion percentage, and
satisfies the "base erosion test" under Regulations section • Determining the applicable taxpayer’s modified taxable
1.59A-2(e), generally by having deductions with respect to income.
amounts paid or accrued to foreign related parties that are 3% or
higher of their total deductions (2% if any member of the Use Schedule B to report the amount of deductions being
aggregate group is a member of an affiliated group that includes waived for the tax year.
a bank or registered security dealer). Large corporations are Use Schedule C to determine the credits that reduce regular
those whose aggregate group satisfies the "gross receipts test" tax liability in computing the base erosion minimum tax amount.
of Regulations section 1.59A-2(d), generally by having gross
receipts of $500 million or more. The BEAT operates as a Definitions
minimum tax, so a taxpayer is only subject to additional tax
under the BEAT if the BEAT tax rate multiplied by the taxpayer's Applicable taxpayer. An applicable taxpayer is, with respect to
modified taxable income exceeds the taxpayer's regular tax any tax year, a taxpayer which meets all of the following criteria.
liability adjusted for certain credits. • The taxpayer is a corporation other than a regulated
investment company (RIC), a real estate investment trust (REIT),
On December 6, 2019, the Treasury Department and the IRS or an S corporation.
published final regulations (the “final regulations”) under sections • The taxpayer's aggregate group (or if the taxpayer does not
59A, 383, 1502, and 6038A, and proposed regulations which have an aggregate group, the taxpayer) satisfies the gross
propose other regulations under sections 59A and 6031 (the receipts test, generally by having average annual gross receipts
“2019 proposed regulations”). for the 3-tax-year period ending with the preceding tax year that
On October 9, 2020, the Treasury Department and the IRS are at least $500 million.
published final regulations (the “2020 final regulations”) providing • The taxpayer's aggregate group (or if the taxpayer does not
additional guidance under sections 59A, 1502, and 6031. have an aggregate group, the taxpayer) satisfies the base
erosion test, generally by having a base erosion percentage for
What’s New the tax year of 3% or higher; 2% or higher for a taxpayer who is a
member of an affiliated group that includes a bank (as defined in
Schedule A, line 2. A new line 2 has been added to include section 581) or a registered securities dealer as defined in
payments related to cost sharing transactions payments as Regulations section 1.59A-1(b)(15).
defined in Regulations section 1.482-7(b)(1)(i). See line 2 under
Schedule A—Base Erosion Payments and Base Erosion Tax See Regulations section 1.59A-2 for more information on how
Benefits, for more information. to determine whether a taxpayer is an applicable taxpayer.
Base erosion minimum tax amount. The base erosion
Reminders minimum tax amount for the tax year is the excess of 10% (5% in
Corrected Form 8991. If you file a Form 8991 that you later the case of a tax year beginning in 2018) of the modified taxable
determine is incomplete or incorrect, file a corrected Form 8991 income of the applicable taxpayer for the tax year over the
with an amended tax return, using the amended return applicable taxpayer’s regular tax liability under section 26(b),
instructions for the return with which you originally filed Form reduced (but not below zero) by the excess, if any, of:
8991. Write “Corrected” at the top of the form and attach a 1. The credits allowed under chapter 1 of subtitle A of the
statement identifying the changes. Code (“chapter 1”) against the applicable taxpayer’s regular tax
liability over
Reporting requirements and penalties. P.L. 115-97 also
expanded the information reporting requirements under section 2. The sum of:
6038A and increased the amount of the penalty for failure to a. The credit allowed under section 38 which is properly
furnish information or maintain records under section 6038A(d) allocable to the research credit determined under section 41(a),
(1) and (2) from $10,000 to $25,000. See Form 5472, plus
Instructions for Form 8991 (Rev. 12-2024) Catalog Number 71330Z
Oct 2, 2024 Department of the Treasury Internal Revenue Service www.irs.gov

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b. The portion of the applicable section 38 credits not in day of the tax year and any additional times required by the
excess of 80% of the lesser of the amount of the applicable taxpayer’s method of accounting, (b) treats the recognized gain
section 38 credits or the base erosion minimum tax amount or loss as ordinary, and (c) treats the character of all payments
determined without taking the applicable section 38 credits into made with respect to the derivative as ordinary. A payment is not
account, plus a qualified derivative payment if the payment is properly
c. Any credits allowed under sections 33, 37, and 53. allocable to a non-derivative component of a contract or if the
payment would be treated as a base erosion payment if it were
If the applicable taxpayer is a member of an affiliated group not made pursuant to a derivative, such as an interest, royalty, or
under section 1504(a)(1) that includes a bank (as defined in services payment.
section 581) or a registered securities dealer (as defined in • Effectively connected income and income taken into account
Regulations section 1.59A-1(b)(15)), the tax rate in effect for the in U.S. taxable income under an income tax treaty.
tax year for the base erosion minimum tax amount is increased 1. Amounts paid or accrued that are subject to U.S. federal
by an additional 1%. income taxation as income that is effectively connected to a U.S.
See Regulations section 1.59A-5 for more information on how trade or business if the taxpayer receives a withholding
to compute the base erosion minimum tax amount. certificate with respect to the income.
Base erosion payment. A base erosion payment is any 2. If the foreign related party determines its taxable income
amount paid or accrued by a taxpayer to a foreign person (as applying the business profits provisions of an income tax treaty,
defined in Regulations section 1.59A-1(b)(10)) that is a related amounts paid or accrued to the foreign related party that are
party (as defined in Regulations section 1.59A-1(b)(12)) with taken into account in determining its taxable income.
respect to which a deduction is allowable under chapter 1. • Exchange loss from section 988 transactions.
The amount paid or accrued, and the identity of the payor and • Certain deductions for amounts paid or accrued with respect
recipient of the amount paid or accrued, is determined under to certain total loss absorbing capacity (TLAC) securities and
general tax principles. certain foreign TLAC securities.
• Amounts transferred in connection with certain specified
An amount paid or accrued includes an amount paid or nonrecognition transactions. See Regulations section 1.59A-3(b)
accrued using any form of consideration, such as cash, property, (3)(viii) for more information.
stock, a partnership interest, or the assumption of a liability. • Amounts paid by the taxpayer to a regulated foreign insurance
Base erosion payments are generally determined on a gross company under a reinsurance contract for reinsurance losses
basis, unless the Code or regulations expressly permit netting of incurred or claims payments that are ultimately paid by the
amounts in determining payments. foreign insurance company to an unrelated party.
For purposes of determining whether a taxpayer has made a See Regulations section 1.59A-3(b)(3)(i)–(ix) for further
base erosion payment, the taxpayer must treat a payment to or information on whether a payment or accrual is not a base
from a partnership as made to or from each partner. See erosion payment.
Regulations section 1.59A-7 for more information on how the
BEAT applies to partners. Related party. A related party is:
• Any 25% owner of the taxpayer (as defined in Regulations
Base erosion payments also include the following. section 1.59A-1(b)(17)(ii)),
• Amounts paid or accrued by a taxpayer to a foreign related • Any person who is related (within the meaning of section
party in connection with the acquisition of depreciable or 267(b) or 707(b)(1)) to the taxpayer or any 25% owner of the
amortizable property. taxpayer, or
• Premiums or other consideration paid or accrued by a • A controlled taxpayer within the meaning of section 1.482-1(i)
taxpayer to a foreign related party for reinsurance payments (5) together with, or with respect to, the taxpayer.
which are taken into account under section 803(a)(1)(B) or
section 832(b)(4)(A). Section 318, with certain modifications, applies in
• Any amount paid or accrued by a taxpayer to a related party determining whether a person is a related party. See Regulations
that is a surrogate foreign corporation (if that corporation first section 1.59A-1(b)(17)(iii) for additional rules relating to the
became a surrogate foreign corporation after November 9, modification of section 318 for use in determining a person’s
2017), or a foreign person which is a member of the same relatedness.
expanded affiliated group as the surrogate foreign corporation Base erosion tax benefit. Generally, a base erosion tax
(collectively, “expatriated entities”), which results in a reduction benefit is any deduction that is allowed under chapter 1 for the
to gross receipts. See section 59A(d)(4) for more information. tax year for any base erosion payment. Base erosion tax benefits
See Regulations section 1.59A-3 for more information on the also include any deductions allowed for the tax year for
definition of a base erosion payment. depreciation or amortization with respect to the property
acquired with a base erosion payment (that are paid or accrued
Base erosion payments do not include the following types of in tax years beginning after 2017). Base erosion tax benefits also
payments made to a foreign person that is a related party. include certain reductions in the gross amount of premiums and
• Amounts resulting in a reduction to determine gross income, other consideration on insurance and annuity contracts, or any
such as cost of goods sold. deduction from the amount of gross premiums written on
• Amounts paid or accrued for services if such services are insurance contracts during the tax year for premiums paid for
services that meet the requirements for eligibility for use of the reinsurance, and payments to certain expatriated entities (as
services cost method under section 482 (determined without defined under Base erosion payment, earlier) that cause a
regard to the requirement that the services not contribute reduction in gross receipts in computing gross income of the
significantly to the fundamental risks of business success or taxpayer for the tax year.
failure), but only to the extent of the total services cost of those
services. The mark-up component paid or accrued to a foreign See the instructions for Schedule A, later, for special rules
related party is a base erosion payment. applicable in determining the amount of the base erosion tax
• Qualified derivative payments. A qualified derivative payment benefit when taxes have been imposed by section 871 or 881
is a payment made by a taxpayer pursuant to a derivative with and withheld under section 1441 or 1442 on a base erosion
respect to which the taxpayer (a) recognizes gain or loss as if the payment; or when the taxpayer has made an interest payment
derivative were sold for its fair market value on the last business

2 Instructions for Form 8991 (Rev. 12-2024)

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that gives rise to a base erosion tax benefit and section 163(j) the United States or income taken into account in determining
applies for the tax year. net taxable income using an income tax treaty.
Base erosion percentage. The base erosion percentage of the An aggregate group is determined for each taxpayer. A
taxpayer's aggregate group (or if the taxpayer does not have an taxpayer that is a member of an aggregate group determines its
aggregate group, the taxpayer) is determined by dividing: gross receipts and base erosion percentage on the basis of its
aggregate group by taking into account the gross receipts, base
1. The aggregate amount of base erosion tax benefits for the
erosion payments, base erosion tax benefits, and deductions of
tax year (numerator) by
the members of the aggregate group for the tax years that end
2. The aggregate amount allowed deductions and base with or within the taxpayer's tax year.
erosion tax benefits (denominator). The denominator excludes
See Regulations section 1.59A-2(c) for further information on
the following deductions.
how to apply the aggregation rules.
a. Any deduction allowed under sections 172, 245A, or 250.
b. Any deduction for amounts paid or accrued for services to Who Must File
which the exception under Regulations section 1.59A-3(b)(3)(i) Any corporation, other than a RIC, a REIT, or an S corporation,
for the section 482 services cost method applies. that has (or is a member of an aggregate group that has) annual
c. Any deduction for qualified derivative payments which are gross receipts of at least $500 million in 1 or more of the 3
not treated as base erosion payments as a result of Regulations preceding tax years ending with the preceding tax year must file
section 1.59A-3(b)(3)(ii). Form 8991.
d. Exchange loss from section 988 transactions that is not a See Form 8991, Part I, lines 1a through 1g, and Specific
base erosion payment as a result of the exception under Instructions, later, to determine whether the corporation has
Regulations section 1.59A-3(b)(3)(iv). gross receipts of at least $500 million in 1 or more of the 3
e. Any deduction for amounts paid or accrued to foreign preceding tax years.
related parties with respect to TLAC securities and foreign TLAC See also questions/items and related instructions in the
securities that are not treated as base erosion payments as a following forms.
result of Regulations section 1.59A-3(b)(3)(v). Question 22, Schedule K, Form 1120.
•
f. Any reinsurance losses incurred or claims payments that • Item DD, Form 1120-F.
are not treated as base erosion payments as a result of the • Question 14, Schedule M, Form 1120-L.
exception under Regulations section 1.59A-3(b)(3)(ix). • Question 15, Schedule I, Form 1120-PC.
g. Any deduction not allowed in determining taxable income. • Question 16, Schedule K, Form 1120-C.

See Regulations section 1.59A-2(e)(3) for further information When To File
on how to compute the base erosion percentage. Attach Form 8991 to your income tax return (or, if applicable,
Modified taxable income. Modified taxable income is the exempt organization business income tax return) and file by the
applicable taxpayer’s taxable income plus any base erosion tax due date (including extensions) for that return.
benefit with respect to any base erosion payment and the base
erosion percentage of any net operating loss deduction allowed
under section 172 for the tax year. Specific Instructions
See Regulations section 1.59A-4(b) for further information on Note. Complete every applicable entry space on Form 8991. Do
the computation of modified taxable income. not enter “See Attached” or “Available Upon Request” instead of
Applicable section 38 credits. Applicable section 38 credits completing the entry spaces. If more space is needed on the
are the credits allowed under section 38 for the tax year that are forms or schedules, attach separate sheets using the same size
properly allocable to: and format as the printed forms.
• The low-income housing credit determined under section If there are supporting statements and attachments, arrange
42(a); them in the same order as the schedules or forms they support
• The renewable electricity production credit determined under and attach them last. Show the totals on the printed forms. Enter
section 45(a); and the filer’s name and employer identification number (EIN) on
• The investment credit determined under section 46, but only each supporting statement or attachment.
to the extent properly allocable to the energy credit determined
under section 48. Part I—Applicable Taxpayer
See also the instructions for Schedule C, later. Determination
Aggregation rules. When applying the gross receipts test and
base erosion percentage test, a taxpayer that is a member of an Average Annual Gross Receipts for the
aggregate group determines its gross receipts and base erosion 3-Tax-Year Period Ending With the Preceding
percentage as if it were one person, on the basis of its aggregate Tax Year
group. A taxpayer is a member of an aggregate group if it
belongs to a controlled group of corporations. The term A taxpayer that falls within the definition of Who Must File,
“controlled group of corporations” has the meaning given by earlier, and is filing Form 8991 should complete lines 1a through
section 1563(a) except that: 1g to determine their average annual gross receipts for the
3-tax-year period ending with the preceding tax year.
1. “More than 50%” is substituted for “at least 80%” each
place it appears in section 1563(a), and For purposes of determining average annual gross receipts, a
2. The determination of the controlled group of corporations foreign corporation's gross receipts are included only when such
is made without regard to sections 1563(a)(4) and (e)(3)(C). gross receipts are taken into account when determining the
foreign corporation's income effectively connected with a U.S.
Foreign corporations are excluded from an aggregate group trade or business (“ECI”). If the foreign corporation is subject to
except to the extent the foreign corporation has income tax on a net basis pursuant to a U.S. income tax treaty, only
effectively connected with the conduct of a trade or business in gross receipts that are attributable to transactions taken into
Instructions for Form 8991 (Rev. 12-2024) 3

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account in determining the foreign corporation's net taxable • Any reduction under section 803(a)(1)(B) in the gross amount
income are included in the gross receipts determination. of premiums and other consideration on insurance and annuity
contracts for premiums and other consideration arising out of
Line 1a. Enter in column (a) your gross receipts for the first
indemnity insurance, and
preceding tax year. Enter in column (b) your gross receipts for
the second preceding tax year. Enter in column (c) your gross • Any deduction under section 832(b)(4)(A) from the amount of
gross premiums written on insurance contracts during the tax
receipts for the third preceding tax year.
year for premiums paid for reinsurance.
Only include the gross receipts of the filer on line 1a. Do not
include on this line the gross receipts of all other persons treated Line 2d. Enter the aggregate amount paid or accrued with
as one person under the aggregation rules of Regulations respect to expatriated entities that results in a reduction of the
section 1.59A-2(c) which should be reported on line 1c. See the gross receipts of the taxpayer.
instructions for line 1c, later. Line 2f. Enter the amount from Schedule A, line 5b.
Line 1b. Enter in column (a) gross receipts from partnerships Line 2g. Enter the amount from Schedule A, line 9b.
for the first preceding tax year. Enter in column (b) gross receipts
from partnerships for the second preceding tax year. Enter in Line 2h. Enter the aggregate amount of deductions allowed
column (c) gross receipts from partnerships for the third under sections 172, 245A, and 250.
preceding tax year. Line 2i. If an election is made to waive deductions in
A filer must report total ECI gross receipts from Schedule K-3 accordance with Regulations section 1.59A-3(c)(6)(i), check the
(Form 1065), Part IX, Section 1, lines 2–4, column (b), received “Yes” box on line 2i; complete Schedule B, Waiver of Deductions;
from partnerships in which the taxpayer holds partnership and enter the amount from line 15 of Schedule B. If the taxpayer
interests. is a member of an aggregate group, and another member of the
aggregate group has also made the election to waive deductions
Line 1c. Enter in column (a) gross receipts of all other persons as described above, also include the amount of the member's
treated as one person under the aggregation rules of waived deductions in line 2i. See Schedule B, later.
Regulations section 1.59A-2(c) (the “aggregate gross receipts”)
for the first preceding tax year. Enter in column (b) the aggregate Line 2j. Enter the aggregate amount of deductions for exchange
gross receipts for the second preceding tax year. Enter in losses from section 988 transactions described in Regulations
column (c) the aggregate gross receipts for the third preceding section 1.59A-2(e)(3)(ii)(D).
tax year. Do not include on line 1c gross receipts that have Line 2k. Enter the aggregate amount of deductions for TLAC
already been included on line 1a. securities and foreign TLAC securities described in Regulations
Line 1f. If the taxpayer was not in existence for the entire 3-year section 1.59A-2(e)(3)(ii)(E).
period referenced in columns (a), (b), and (c), the taxpayer must Line 2l. Enter the aggregate amount of reinsurance losses
determine a gross receipts average for the period that it was in incurred and claims payments described in Regulations section
existence (which includes the current year's gross receipts). See 1.59A-2(e)(3)(ii)(F).
Regulations section 1.59A-2(d)(2) for further information.
Line 2p. If you check “No” for line 2p, you are not subject to the
Line 1g. If you check “No” on line 1g, you are not subject to the tax on base erosion payments of taxpayers with substantial
section 59A tax on base erosion payments of taxpayers with gross receipts. Skip Parts II–IV. Complete Part V and
substantial gross receipts. Do not complete the remaining lines. Schedule A. Complete Schedule B if necessary. Do not
Attach Form 8991 to your tax return. complete Schedule C. Attach Form 8991 and the completed
If you check “Yes” on line 1g, continue to line 2a. Schedule A (and, if applicable, Schedule B) to your tax return.
If you check “Yes” for line 2p, continue to Part II.
Base Erosion Percentage for the Tax Year
Complete lines 2a through 2o to determine your base erosion Part II—Modified Taxable Income
percentage for the tax year. See the definition of aggregation See Regulations section 1.59A-4 for further details on how to
rules, earlier, for information on how to determine the base determine modified taxable income.
erosion percentage for an aggregate group. If the taxpayer is not
a member of an aggregate group, the taxpayer should enter its Line 3a. Enter the amount of taxable income after any net
own amounts in lines 2a through 2o. operating loss. The amount here does not include special
deductions.
A taxpayer is subject to the 2% base erosion percentage If the current year reports a loss, without any net operating
threshold if it or any member of its aggregate group is a member loss carryovers, the amount entered here may be less than zero.
of an affiliated group (as defined in section 1504(a)(1)) that If the current year reports taxable income and there is a net
includes a bank (as defined in section 581) or a registered operating loss carryover that would reduce taxable income
securities dealer (as defined in Regulations section 1.59A-1(b) below zero, enter “-0-.” Do not enter an amount less than zero.
(15)).
Line 3b. Enter the amount of base erosion tax benefits for the
Line 2a. Enter the amount of base erosion tax benefits from tax year with respect to base erosion payments from
Schedule A, line 15, column (a-2). Schedule A, line 15, column (b-2).
Line 2b. Enter the aggregate amount of deductions allowed Line 3c. Enter the amount of net operating loss deduction to be
under chapter 1 (sections 1 through 1400) for the tax year. The added back to taxable income for purposes of determining
amount entered should be the aggregate deductions allowed to modified taxable income. To calculate this amount, first
all persons that are treated as one person under the aggregation determine the amount of net operating loss deduction allowed
rules. Do not include amounts reported on line 2c (reinsurance under section 172 that does not exceed taxable income before
payments) or amounts reported on line 2d (payments to taking into account the net operating loss deduction for all
expatriated entities). applicable tax years. Second, multiply this net operating loss
Line 2c. For reinsurance payments paid or accrued that are deduction by the base erosion percentage for the tax year in
base erosion payments described in Regulations section which the net operating loss arose. If the net operating loss
1.59A-3(b)(1)(iii), enter the aggregate amount of: deduction is attributable to net operating losses that arose in

4 Instructions for Form 8991 (Rev. 12-2024)

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more than 1 tax year, multiply the net operating loss attributable
to each tax year by the base erosion percentage for that tax year Schedule A—Base Erosion Payments
and determine the total amount by adding the result from each and Base Erosion Tax Benefits
tax year. For any tax year beginning before 2018, the base Schedule A is required to be attached if a corporation has
erosion percentage is zero. average annual gross receipts of $500 million or more for the
Line 3d. Combine the amounts on lines 3a through 3c. 3-tax-year period ending with the preceding tax year. This
schedule requires a taxpayer to report all amounts that are base
Part III—Regular Tax Liability erosion payments as defined in Regulations section 1.59A-3(b)
and base erosion tax benefits as defined in Regulations section
Adjusted for Purposes of Computing 1.59A-3(c). This schedule also requires a taxpayer to report any
Base Erosion Minimum Tax Amount amounts that qualify for certain exceptions applicable to
amounts that are not treated as base erosion payments.
Line 4a. Enter the amount of regular tax liability (as defined in
section 26(b)) of the applicable taxpayer for the tax year. For lines 2 through 11, complete columns (a-1), (a-2), (b-1),
Consolidated groups. Affiliated groups of corporations filing and (b-2) for each type of payment made by the taxpayer (or,
consolidated returns, please review any additional information at where applicable, member of the taxpayer's aggregate group) to
IRS.gov/Form8991. a foreign related party of the taxpayer during the tax year. For
each type of payment reported on lines 2 through 11 of column
Line 4c. Subtract line 4b from 4a. If zero or less, enter “-0-.” (a-1), check all applicable boxes in columns (c), (d), and (e) to
indicate the type of related party who received the base erosion
Part IV—Computation of Base payment from the taxpayer.
Erosion Minimum Tax Amount Consolidated groups. Affiliated groups of corporations filing
Line 5b. Enter the applicable tax rate for the tax year. For tax consolidated returns, please review any additional information at
years beginning during 2018, the applicable rate is 5%. For tax IRS.gov/Form8991.
years beginning and ending during 2019 through 2025, the Columns (a-1) and (a-2). Columns (a-1) and (a-2) are used to
applicable rate is 10%. For any tax year that includes January 1, determine the base erosion percentage, as defined in
2026, the applicable rate is 12.5%. Regulations section 1.59A-2(e). Enter in columns (a-1) and (a-2)
The rates above are increased by 1% if the applicable the amount of aggregate base erosion payments and aggregate
taxpayer is a member of an affiliated group (as defined in section base erosion tax benefits, respectively, that correspond to each
1504(a)(1)) that includes either a bank (as defined in section type of base erosion payment specified on lines 2 through 11.
581), or a registered securities dealer (as defined in Regulations The aggregate base erosion payment entered in these lines
section 1.59A-1(b)(15)). should include only those base erosion payments paid or
accrued in the current year. The aggregate base erosion tax
Line 5e. Subtract line 5d from line 5c. If zero or less, enter “-0-.” benefit entered in these lines should only include those base
This is your base erosion minimum tax amount. Enter this erosion tax benefits allowed in the current year, which may relate
amount on your applicable tax return. For example, for an to a base erosion payment paid or accrued in the current year or
applicable taxpayer filing Form 1120, enter this amount on a prior year. The aggregate base erosion tax benefits in column
Schedule J, line 1f. (a-2), lines 2 through 11, should be the amounts determined
before applying the exception in Regulations section 1.59A-3(c)
Part V—Additional Questions (3) (base erosion tax benefits disregarded if tax withheld on base
Line 6. If the taxpayer is electing to use financial statements per erosion payment).
Regulations section 1.59A-3(b)(4)(i)(D) for purposes of Aggregate base erosion payments include the base erosion
calculating interest expense allocable to a foreign corporation's payments of all persons treated as one person pursuant to the
effectively connected income, check “Yes”; otherwise, check aggregation rules (see the definition of aggregation rules,
“No.” earlier). Similarly, aggregate base erosion tax benefits include
Line 7. Indicate if in the current year, the taxpayer capitalized to the base erosion tax benefits of all persons treated as one
inventory, or included in cost of goods sold (COGS), any cost person pursuant to the aggregation rules.
incurred for any payment to a related foreign party that the However, if the taxpayer is not a member of an aggregate
taxpayer treated as a deduction in any prior tax year starting on group, the taxpayer will enter in columns (a-1) and (a-2) the
or after January 1, 2018. If the answer is yes, check “Yes” and amount of its own base erosion payments and base erosion tax
complete line 8. benefits, respectively, that correspond to each type of base
erosion payment specified on lines 2 through 11, determined
Line 8, column (i). Indicate the amount capitalized or included before applying the exception in Regulations section 1.59A-3(c)
in COGS for the current year. (3).
Line 8, column (ii). Indicate a detailed description of the Columns (b-1) and (b-2). Columns (b-1) and (b-2) are used to
item(s) capitalized or included in COGS such as sales-based determine modified taxable income, as described in Regulations
royalties, production-based royalties, trademarks, tradenames, section 1.59A-4, of the applicable taxpayer. Enter in columns
section 482 adjustments, transportation costs, etc. (b-1) and (b-2) the amount of base erosion payments and base
Line 8, column (iii). Indicate the line item(s) where the erosion tax benefits, respectively, that correspond to the type of
deduction was claimed on a prior year return, for example, base erosion payments specified in lines 2 through 11. Enter in
line 26, 27, or other line(s) on Form 1120-F, Form 1120, etc. these columns the applicable taxpayer’s own base erosion
payments and base erosion tax benefits, without applying the
Line 8, column (iv). If an accounting method change was filed aggregation rules. The base erosion tax benefit in column (b-2),
on Form 3115 regarding items in column (i), indicate the tax year lines 2 through 11, should be an amount determined before
in which the filing(s) was made. If no Form 3115 was filed, applying the exception in Regulations section 1.59A-3(c)(3) (tax
indicate in an attachment the reason(s) why. Attach additional benefits disregarded if tax withheld on base erosion payment).
sheets, if necessary, to report multiple row items starting with d,
e, etc. Line 1. This line is reserved and should not be used at this time.

Instructions for Form 8991 (Rev. 12-2024) 5

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Line 2. Enter the amount paid or accrued as cost sharing              Line 7, columns (a-2) and (b-2). Enter the amount of 
transaction payments to a foreign related party as defined in         deductions allowed under chapter 1 for the tax year for amounts 
Regulations section 1.482-7(b)(1)(i) for the tax year. Do not         paid or accrued to a foreign related party for the purchase of 
report any negative amounts here for base erosion payments.           tangible personal property.
Line 3, columns (a-1) and (b-1). Enter the amount paid or             Line 8, columns (a-1) and (b-1). Enter the amount of any 
accrued to a foreign related party in connection with the             premiums or other consideration paid or accrued to a foreign 
acquisition or creation of intangible property rights (patents,       related party for insurance and reinsurance that are taken into 
copyrights, trademarks, trade secrets, etc.) that is subject to the   account under section 803(a)(1)(B) (relating to return premiums 
allowance for depreciation (or amortization in lieu of                and premiums or other consideration arising out of indemnity 
depreciation).                                                        reinsurance that reduces life insurance gross income) or section 
                                                                      832(b)(4)(A) (relating to amounts deducted from gross premiums 
Line 3, columns (a-2) and (b-2). Enter the amount of 
                                                                      written on insurance contracts for return premiums and 
deductions allowed under chapter 1 for the tax year for 
                                                                      premiums paid for reinsurance). See Regulations section 
depreciation (or amortization in lieu of depreciation) with respect 
                                                                      1.59A-3(b)(1)(iii).
to intangible property rights acquired in the current or prior years 
from a foreign related party.                                         Line 8, columns (a-2) and (b-2). Enter the amount of any 
                                                                      reduction under section 803(a)(1)(B) in gross premiums and 
Line 4, columns (a-1) and (b-1). Enter the amount paid or 
                                                                      other consideration on insurance and annuity contracts for 
accrued to a foreign related party for the use or right to use 
                                                                      premiums and other consideration arising out of indemnity 
tangible or intangible property resulting in rents, royalties, and/or 
                                                                      insurance paid to a foreign related party, and the amount of any 
license fees.
                                                                      deduction under section 832(b)(4)(A) from the amount of gross 
Line 4, columns (a-2) and (b-2). Enter the amount of                  premiums written on insurance contracts during the tax year for 
deductions allowed under chapter 1 for the tax year for amounts       premiums paid to a foreign related party for reinsurance.
paid or accrued to a foreign related party for the use or right to 
                                                                      Line 9a, columns (a-1) and (b-1). Enter the amount paid or 
use tangible or intangible property that results in rents, royalties, 
                                                                      accrued to a foreign related party with respect to any derivative 
and/or license fees.
                                                                      contract that is not a qualified derivative payment as defined in 
Line 5a, columns (a-1) and (b-1). Enter the amount paid or            Regulations section 1.59A-6. Do not include any amount paid 
accrued to a foreign related party as compensation or                 that is a qualified derivative payment.
consideration for services, but excluding any amount that falls 
                                                                      Line 9a, columns (a-2) and (b-2). Enter the amount of 
within the exception in Regulations section 1.59A-3(b)(3)(i). 
                                                                      deductions allowed under chapter 1 for the tax year for amounts 
Enter amounts paid or accrued in excess of the total services 
                                                                      paid or accrued to a foreign related party with respect to any 
cost of the services eligible for the services cost method 
                                                                      payment that is not a qualified derivative payment. Do not 
exception (or the mark-up component). Also, enter amounts paid 
                                                                      include any deductions allowed under chapter 1 for the tax year 
or accrued for services ineligible for the services cost method 
                                                                      if the deductible amount is a qualified derivative payment.
exception.
                                                                      Line 9b. Enter the amount paid to a foreign related party that is 
Line 5a, columns (a-2) and (b-2). Enter the amount of 
                                                                      a qualified derivative payment excepted by Regulations section 
deductions allowed under chapter 1 for the tax year for amounts 
                                                                      1.59A-6(b). Determine the amount of the qualified derivative 
paid or accrued to a foreign related party as compensation or 
                                                                      payments after applying the aggregation rules. Generally, a 
consideration for services, but excluding any deduction for 
                                                                      qualified derivative payment is any payment made by the 
amounts paid or accrued that fall within the exception in 
                                                                      taxpayer pursuant to a derivative contract provided that the 
Regulations section 1.59A-3(b)(3)(i). Enter amounts of 
                                                                      taxpayer recognizes gain or loss on the derivative contract as if it 
deductions allowed under chapter 1 for the tax year for amounts 
                                                                      were sold for its fair market value on the last business day of the 
paid or accrued in excess of the total services cost of the 
                                                                      tax year; treats the gain or loss as ordinary; and treats the 
services eligible for the services cost method exception (or the 
                                                                      character of all other items of income, deduction, gain, or loss 
mark-up component). Also, enter amounts of deductions for 
                                                                      with respect to a payment pursuant to the derivative as ordinary. 
services ineligible for the services cost method exception.
                                                                      A payment is not a qualified derivative payment if the payment 
Line 5b. Enter the amount paid or accrued to a foreign related        would be treated as a base erosion payment if it were not made 
party as compensation or consideration for services that are          pursuant to a derivative (such as interest, royalty, or services 
defined under the exception in Regulations section 1.59A-3(b)(3)      income). With respect to a contract with both derivative and 
(i). Determine the amount of compensation or consideration            non-derivative components, a payment is not a qualified 
eligible for this exception after applying the aggregation rules.     derivative payment if it is properly allocable to the non-derivative 
Line 6, columns (a-1) and (b-1). Enter the amount of all              component.
interest paid or accrued to a foreign related party with respect to   A taxpayer meets the reporting requirement of Regulations 
which a deduction is allowable in the tax year.                       sections 1.59A-6(b)(2) and 1.6038A-2(b)(7)(ix) by entering the 
                                                                      amount on line 9b. Pursuant to Notice 2024-43, for tax years 
Line 6, columns (a-2) and (b-2). Enter the amount of                  beginning on or after January 1, 2027, a taxpayer will also need 
deductible interest expense allowed under chapter 1 for the tax       to provide a representation that all payments satisfy the 
year with respect to amounts paid or accrued to a foreign related     requirements of Regulations section 1.59A-6(b)(2) and meet the 
party. For purposes of completing line 6, columns (a-2) and           reporting requirement of Regulations sections 1.59A-6(b)(2) and 
(b-2), any reduction in the amount of interest for which a            1.6038A-2(b)(7)(ix).
deduction is allowed for the tax year under section 163(j) is 
treated as allocable first to interest paid or accrued to persons     Line 10, columns (a-1) and (b-1). Enter the amount paid or 
who are not related parties with respect to the taxpayer and then     accrued to certain expatriated entities that results in a reduction 
to such related parties.                                              of the gross receipts of the taxpayer. This amount includes 
                                                                      payments to a surrogate foreign corporation that is a related 
Line 7, columns (a-1) and (b-1). Enter the amount paid or             party, but only if the entity first became a surrogate foreign 
accrued to a foreign related party for the purchase of tangible       corporation after November 9, 2017. The amount also includes 
personal property.                                                    payments to a foreign person that is a member of the same 

6                                                                                        Instructions for Form 8991 (Rev. 12-2024)

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expanded affiliated group, as defined in section 7874(c)(1), as and column (b-2) amounts on line 14, as necessary. Keep a copy
the surrogate foreign corporation. A surrogate foreign of the completed worksheet for your records.
corporation is defined in section 7874(a)(2)(B), but does not
Line 15. Subtract the sum of line 13 and line 14 from line 12,
include a foreign corporation that is treated as a domestic
and enter the amount on line 15. Line 15, column (a-2), is the
corporation under section 7874(b).
total amount of aggregate base erosion tax benefits for the tax
Line 10, columns (a-2) and (b-2). Enter the amount of the year that is used for purposes of determining the taxpayer's base
reduction to gross receipts with respect to payments to erosion percentage. Line 15, column (b-2), is the total amount of
expatriated entities that were used to compute gross income for base erosion tax benefits for the tax year that is used for
the tax year. purposes of determining the taxpayer's modified taxable income.
Line 15, column (b-2), is also the total amount of base erosion
Line 11, columns (a-1) and (b-1). Enter the total amount of
tax benefits for the tax year that is used for purposes of
any other base erosion payments that were paid or accrued to a
determining the taxpayer's base erosion percentage when the
foreign related party and for which a deduction is allowable
taxpayer is not a member of an aggregate group.
under chapter 1. Only include those amounts that have not
otherwise been included in Schedule A on lines 2 through 10.
Instructions for Worksheet for Schedule A,
Line 11, columns (a-2) and (b-2). Enter the amount of Line 14
deductions allowed under chapter 1 for the tax year for other
base erosion payments paid or accrued to a foreign related Use a separate row for each type of base erosion payment and
party. Only include those amounts that have not otherwise been each treaty-reduced withholding tax rate to which the
included in Schedule A on lines 2 through 10. corresponding base erosion tax benefit is subject.
Do not include a base erosion tax benefit that is subject to the
Attach a statement for line 11. For amounts reported on 30% statutory withholding tax rate or a base erosion tax benefit
line 11, attach a statement describing the type and amount of that is exempt from tax pursuant to relevant income tax treaty
other payments, using the same column headings as specified in provisions.
Schedule A: “Aggregate Group's Base Erosion Payments,”
“Aggregate Group's Base Erosion Tax Benefits,” “Taxpayer's Do not combine the base erosion tax benefits that are subject
Base Erosion Payments,” and “Taxpayer's Base Erosion Tax to different withholding rates. Do not enter any blended
Benefits.” For each type of payment, the attachment must withholding tax rates.
identify the relationship of the recipients consistent with the Column A. Enter the type of base erosion payment that
categories and instructions for columns (c), (d), and (e) of corresponds to the type of base erosion payment in Schedule A.
Schedule A.
Column B. Enter the amount of base erosion tax benefits that
Line 12. For columns (a-1), (a-2), (b-1), and (b-2), add lines 2 correspond to the specific type of base erosion payment on
through 11 and enter the total amount. which tax is imposed under section 871 or section 881, and with
Line 13. Enter the aggregate amount of base erosion tax respect to which tax is deducted and withheld at a reduced
benefits from columns (a-2) and (b-2) of lines 2 through 11 on withholding rate pursuant to a U.S. income tax treaty.
which either (1) tax is imposed under section 871(a) or section Column C. Enter the treaty-reduced withholding tax rate to
881, and with respect to which tax has been deducted and which the base erosion tax benefit is subject.
withheld under section 1442 (or section 1441) at a 30% rate; or
(2) tax is imposed under section 884(f) at a 30% rate and the tax Column D. Divide the tax rate in column C by 30% (0.30).
is reported and paid under Regulations section 1.884-4(a)(2)(iv). Round to four decimal places.
Line 14. Complete the Worksheet for Schedule A, Line 14 to Column E. Multiply the amount in column B by column D. The
determine the portion of the base erosion tax benefits from lines amount is the portion of base erosion tax benefits with respect to
2 through 11 on which, pursuant to a U.S. income tax treaty, tax the specific type of base erosion payment and the specific
is either (1) imposed under section 871 or section 881 at a treaty-reduced rate of withholding that is not taken into account
reduced withholding rate or (2) imposed under section 884(f) in computing modified taxable income. Add the amounts in
and paid and reported at a reduced rate. The amount to be column E and enter the total on Schedule A, line 14, column
entered on line 14 is the same proportion of such base erosion (a-2) or (b-2).
tax benefits as the reduced rate of tax specified by the relevant
treaty bears to the rate of tax imposed without regard to the Schedule B—Waiver of Deductions
treaty. Complete a separate worksheet for column (a-2) amounts Schedule B is used to report all the deductions being waived for
the tax year in accordance with Regulations section 1.59A-3(c)
(6)(i). Columns (a) through (i) are to be completed for each item
Worksheet for Schedule A, Line 14
A B C D E
Type of base erosion payment Amount of base erosion tax Treaty-reduced withholding rate Divide column C by 30% (0.30) Multiply column B by column D
benefit (round to four decimal places)
%
%
%
%
%
Add the amounts in column E and enter the total on the appropriate line on Schedule A, line 14.

Instructions for Form 8991 (Rev. 12-2024) 7

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or property of which a deduction related to such item or property under sections 33, 37, and 53. Total credits include the sum of all
is being waived. credits shown on Form 1120 or other applicable return.
You should use lines 1 through 13 to report only your Line 2. Enter the total amount of credit for increasing research
! own deductions that you are electing to waive. If a activities reported on Form 3800, Part III, line 1c, column (g),
CAUTION member or members of your aggregate group has also plus Part IV, line 1c, column (g). This total equals the available
elected to waive any of its deductions, complete a separate credit for increasing research activities in the tax year.
attachment for each member of the aggregate group that is
Line 3. Enter only that portion of the available credit for
waiving deductions which contains the name and EIN of the
increasing research activities which was included on Form 3800,
aggregate group member and the information shown in columns
Part II, Section D, line 38, and used against regular tax liability.
(a) through (i). Attach each attachment to Schedule B. Include
You must apply the general rules and the ordering rules for use
the total amount of the deductions being claimed by all of your
of general business credits from the Instructions for Form 3800.
aggregate group members with respect to the items or property
The Instructions for Form 3800 provide that credits reported on
that their respective waiver elections relate to on line 14, column
Form 3800 are treated as used on a first-in, first-out basis by
(h) and the total of all of the deductions being waived by the
offsetting the earliest earned credits first. Therefore, the order in
members on line 14, column (i). See the instructions for line 14,
which the credits are used in any tax year is:
later.
• Carryforwards to that year, the earliest ones first;
Column (a). Enter a brief description of the item or property to • The general business credit earned in that year; and
which the deduction relates to; for example, debt instrument, • The carryback to that year.
intangible property (such as patent, trademark, or license), If your general business credits exceed your tax liability limit,
personal property, real property, etc. the credits are used in the order as they are listed in section
38(b). Although general business credits are aggregated on
Column (b). Enter the date on which, or the time period which Form 3800, you should have a separate record of each credit.
the waived deduction was paid or accrued.
Line 5. Section 59A(b)(1)(B)(ii)(II) limits the allowable
Column (c). Enter the provision of the Code (and regulations, adjustment for applicable section 38 credits to 80% of the lesser
as applicable) that allows the deduction for the item or property of applicable section 38 credits or the BEMTA computed without
to which the election relates. the adjustment for applicable section 38 credits computed in Part
Column (d). Enter the schedule and line number of the III.
controlled group's federal income tax return where the deduction
is reflected (or would have been reflected). Part II—Applicable Section 38 Credits
Column (e). Enter the name of the foreign related party that is Line 8. Enter the total amount of low-income housing credit
or will be the recipient of the payment that generates the shown on Form 3800, Part III, line 4d, column (g); and Part IV,
deduction. line 2b, column (g) and line 4d, column (g). This total equals the
available credit for low-income housing in the tax year.
Column (f). Enter the tax identification number of the foreign
related party payee that was entered in column (e). This can be Line 9. Enter the total amount of section 45 credit shown on
an EIN, individual taxpayer identification number (ITIN), or Form 3800, Part III, line 1f, column (g); Part III, line 4e, column
foreign tax identification number (FTIN). (g); Part IV, line 1f, column (g); and Part IV, line 4e, column (g).
This total equals the available credit for renewable electricity
Column (g). Enter the country of organization of the foreign production in the tax year.
related party that was entered in column (e).
Line 10. Enter only the total amount of investment credit
Column (h). For each item or property reported under columns allocable to the section 48 energy credit shown on Form 3800,
(a) through (g), enter the amount of the deduction claimed on the Part III, line 4a, column (g); and Part IV, line 4a, column (g). This
tax return (after the waiver indicated in column (i)). total equals the available investment credit properly allocable to
Column (i). For each item or property reported under columns the energy credit in the tax year.
(a) through (g), enter the amount of the deduction being waived. Line 11. Enter only that portion of the available applicable
Line 14. If additional space is necessary, complete and attach a credits which was included on Form 3800, Part II, Section D,
separate worksheet with the same information as shown under line 38, and used against regular tax liability. This represents the
columns (a) through (i) for each additional item or property. Enter amount of applicable credits allowed against regular tax liability
the total of deductions claimed for the tax year on line 14, in the current year. Refer to the ordering rules described in the
column (h) and the total of deductions waived on line 14, column earlier instructions for Schedule C, line 3.
(i).
Also include on this line the total of deductions being claimed Part III—BEMTA Determined Without Adjustment
(column (h)) and waived (column (i)) from other taxpayers that for Applicable Section 38 Credits
are members of your aggregate group, if applicable. Line 15. Subtract line 14 from line 13. If zero or less, enter “-0-.”
Schedule C—Credits Reducing Line 16. You must compute the BEMTA without adjustment for
applicable section 38 credits to allow computation of the
Regular Tax Liability in Computing limitation of applicable section 38 credits on lines 4 and 5 of Part
Base Erosion Minimum Tax Amount I.

(BEMTA)

Part I—Credits Allowed Against Regular Tax
Line 1. You must enter the total credits allowed against your
regular tax liability in the tax year, except for credits allowed

8 Instructions for Form 8991 (Rev. 12-2024)

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Paperwork Reduction Act Notice.      We ask for the information on this form to carry out the Internal Revenue laws of the United 
States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to 
figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form 
displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents 
may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, 
as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for business 
taxpayers filing this form is approved under OMB control number 1545-0123 and is included in the estimates shown in the instructions 
for their business income tax return.

Instructions for Form 8991 (Rev. 12-2024)                                                                                               9

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