PDF document

- 1 -

Userid: CPM Schema: instrx Leadpct: 100% Pt. size: 9 Draft Ok to Print
AH XSL/XML Fileid: … ns/i8991/202312/a/xml/cycle05/source (Init. & Date) _______

Page 1 of 9 7:18 - 6-Dec-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Department of the Treasury
Internal Revenue Service
Instructions for Form 8991

(Rev. December 2023)
Tax on Base Erosion Payments of Taxpayers With Substantial Gross Receipts

Section references are to the Internal Revenue Code unless
otherwise noted. General Instructions

Future Developments Purpose of Form
Use Form 8991 to determine a taxpayer’s base erosion minimum
For the latest information about developments related to Form tax amount for the year.
8991, its schedules, and its instructions, such as legislation
enacted or guidance published after the form and instructions Use Schedule A to determine the amount of base erosion
were issued, go to IRS.gov/Form8991. payments and base erosion tax benefits for purposes of:
• Determining the taxpayer’s base erosion percentage, and
Background • Determining the applicable taxpayer’s modified taxable
The Tax Cuts and Jobs Act of 2017 (P.L. 115-97) added new income.
section 59A (Tax on Base Erosion Payments of Taxpayers with Use Schedule B to report the amount of deductions being
Substantial Gross Receipts), which applies to large corporations waived for the tax year.
that have the ability to reduce U.S. tax liabilities by making
deductible payments to foreign related parties. The Base Use Schedule C to determine the credits that reduce regular
Erosion and Anti-Abuse Tax (BEAT) of section 59A is generally tax liability in computing the base erosion minimum tax amount.
levied on certain large corporations whose aggregate group
Definitions
satisfies the "base erosion test" under Regulations section
1.59A-2(e), generally by having deductions with respect to Applicable taxpayer. An applicable taxpayer is, with respect to
amounts paid or accrued to foreign related parties that are 3% or any tax year, a taxpayer which meets all of the following criteria.
higher of their total deductions (2% if any member of the • The taxpayer is a corporation other than a regulated
aggregate group is a member of an affiliated group that includes investment company (RIC), a real estate investment trust (REIT),
a bank or registered security dealer). Large corporations are or an S corporation.
those whose aggregate group satisfies the "gross receipts test" • The taxpayer's aggregate group (or if the taxpayer does not
of Regulations section 1.59A-2(d), generally by having gross have an aggregate group, the taxpayer) satisfies the gross
receipts of $500 million or more. The BEAT operates as a receipts test, generally by having average annual gross receipts
minimum tax, so a taxpayer is only subject to additional tax for the 3-tax-year period ending with the preceding tax year that
under the BEAT if the BEAT tax rate multiplied by the taxpayer's are at least $500 million.
modified taxable income exceeds the taxpayer's regular tax • The taxpayer's aggregate group (or if the taxpayer does not
liability adjusted for certain credits. have an aggregate group, the taxpayer) satisfies the base
erosion test, generally by having a base erosion percentage for
On December 6, 2019, the Treasury Department and the IRS
the tax year of 3% or higher; 2% or higher for a taxpayer who is a
published final regulations (the “final regulations”) under sections
member of an affiliated group that includes a bank (as defined in
59A, 383, 1502, and 6038A, and proposed regulations which
section 581) or a registered securities dealer as defined in
propose other regulations under sections 59A and 6031 (the
Regulations section 1.59A-1(b)(15).
“2019 proposed regulations”).
See Regulations section 1.59A-2 for more information on how
On October 9, 2020, the Treasury Department and the IRS to determine whether a taxpayer is an applicable taxpayer.
published final regulations (the “2020 final regulations”) providing
additional guidance under sections 59A, 1502, and 6031. Base erosion minimum tax amount. The base erosion
minimum tax amount for the tax year is the excess of 10% (5% in
Reminders the case of a tax year beginning in 2018) of the modified taxable
income of the applicable taxpayer for the tax year over the
Corrected Form 8991. If you file a Form 8991 that you later applicable taxpayer’s regular tax liability under section 26(b),
determine is incomplete or incorrect, file a corrected Form 8991 reduced (but not below zero) by the excess, if any, of:
with an amended tax return, using the amended return 1. The credits allowed under chapter 1 of subtitle A of the
instructions for the return with which you originally filed Form Code (“chapter 1”) against the applicable taxpayer’s regular tax
8991. Write “Corrected” at the top of the form and attach a liability over
statement identifying the changes.
2. The sum of:
Reporting requirements and penalties. P.L. 115-97 also
expanded the information reporting requirements under section a. The credit allowed under section 38 which is properly
6038A and increased the amount of the penalty for failure to allocable to the research credit determined under section 41(a),
furnish information or maintain records under section 6038A(d) plus
(1) and (2) from $10,000 to $25,000. See Form 5472, b. The portion of the applicable section 38 credits not in
Information Return of a 25% Foreign-Owned U.S. Corporation or excess of 80% of the lesser of the amount of the applicable
a Foreign Corporation Engaged in a U.S. Trade or Business, and section 38 credits or the base erosion minimum tax amount
its instructions for further details. determined without taking the applicable section 38 credits into
account, plus
c. Any credits allowed under sections 33, 37, and 53.
If the applicable taxpayer is a member of an affiliated group
under section 1504(a)(1) that includes a bank (as defined in

Dec 1, 2023 Cat. No. 71330Z

- 2 -

Enlarge image

Page 2 of 9 Fileid: … ns/i8991/202312/a/xml/cycle05/source 7:18 - 6-Dec-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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
to certain total loss absorbing capacity (TLAC) securities and
recipient of the amount paid or accrued, is determined under
certain foreign TLAC securities.
general tax principles.
• 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 Related party. A related party is:
BEAT applies to partners. 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 318, with certain modifications, applies in
section 832(b)(4)(A). determining whether a person is a related party. See Regulations
• Any amount paid or accrued by a taxpayer to a related party section 1.59A-1(b)(17)(iii) for additional rules relating to the
that is a surrogate foreign corporation (if that corporation first modification of section 318 for use in determining a person’s
became a surrogate foreign corporation after November 9, relatedness.
2017), or a foreign person which is a member of the same
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 that gives rise to a base erosion tax benefit and section 163(j)
day of the tax year and any additional times required by the applies for the tax year.
taxpayer’s method of accounting, (b) treats the recognized gain Base erosion percentage. The base erosion percentage of the
or loss as ordinary, and (c) treats the character of all payments taxpayer's aggregate group (or if the taxpayer does not have an
made with respect to the derivative as ordinary. A payment is not aggregate group, the taxpayer) is determined by dividing:
a qualified derivative payment if the payment is properly 1. The aggregate amount of base erosion tax benefits for the
allocable to a non-derivative component of a contract or if the tax year (numerator) by
payment would be treated as a base erosion payment if it were
not made pursuant to a derivative, such as an interest, royalty, or
services payment.

-2- Instructions for Form 8991 (Rev. 12-2023)

- 3 -

Enlarge image

Page 3 of 9 Fileid: … ns/i8991/202312/a/xml/cycle05/source 7:18 - 6-Dec-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

2. The aggregate amount allowed deductions and base the members of the aggregate group for the tax years that end
erosion tax benefits (denominator). The denominator excludes with or within the taxpayer's tax year.
the following deductions. See Regulations section 1.59A-2(c) for further information on
a. Any deduction allowed under sections 172, 245A, or 250. how to apply the aggregation rules.
b. Any deduction for amounts paid or accrued for services to
which the exception under Regulations section 1.59A-3(b)(3)(i) Who Must File
for the section 482 services cost method applies. Any corporation, other than a RIC, a REIT, or an S corporation,
c. Any deduction for qualified derivative payments which are that has (or is a member of an aggregate group that has) annual
not treated as base erosion payments as a result of Regulations gross receipts of at least $500 million in 1 or more of the 3
section 1.59A-3(b)(3)(ii). preceding tax years ending with the preceding tax year must file
Form 8991.
d. Exchange loss from section 988 transactions that is not a
base erosion payment as a result of the exception under See Form 8991, Part I, lines 1a through 1g, and Specific
Regulations section 1.59A-3(b)(3)(iv). Instructions, later, to determine whether the corporation has
e. Any deduction for amounts paid or accrued to foreign gross receipts of at least $500 million in 1 or more of the 3
related parties with respect to TLAC securities and foreign TLAC preceding tax years.
securities that are not treated as base erosion payments as a See also questions/items and related instructions in the
result of Regulations section 1.59A-3(b)(3)(v). following forms.
f. Any reinsurance losses incurred or claims payments that • Question 22, Schedule K, Form 1120.
are not treated as base erosion payments as a result of the • Item DD, Form 1120-F.
exception under Regulations section 1.59A-3(b)(3)(ix). • Question 14, Schedule M, Form 1120-L.
g. Any deduction not allowed in determining taxable income. • Question 15, Schedule I, Form 1120-PC.
• Question 16, Schedule K, Form 1120-C.
See Regulations section 1.59A-2(e)(3) for further information
on how to compute the base erosion percentage. When To File
Modified taxable income. Modified taxable income is the Attach Form 8991 to your income tax return (or, if applicable,
applicable taxpayer’s taxable income plus any base erosion tax exempt organization business income tax return) and file by the
benefit with respect to any base erosion payment and the base due date (including extensions) for that return.
erosion percentage of any net operating loss deduction allowed
under section 172 for the tax year.
See Regulations section 1.59A-4(b) for further information on Specific Instructions
the computation of modified taxable income. Note. Complete every applicable entry space on Form 8991. Do
Applicable section 38 credits. Applicable section 38 credits not enter “See Attached” or “Available Upon Request” instead of
are the credits allowed under section 38 for the tax year that are completing the entry spaces. If more space is needed on the
properly allocable to: forms or schedules, attach separate sheets using the same size
• The low-income housing credit determined under section and format as the printed forms.
42(a); If there are supporting statements and attachments, arrange
• The renewable electricity production credit determined under them in the same order as the schedules or forms they support
section 45(a); and and attach them last. Show the totals on the printed forms. Enter
• The investment credit determined under section 46, but only the filer’s name and EIN on each supporting statement or
to the extent properly allocable to the energy credit determined attachment.
under section 48.
See also the instructions for Schedule C, later. Part I—Applicable Taxpayer

Aggregation rules. When applying the gross receipts test and Average Annual Gross Receipts for the
base erosion percentage test, a taxpayer that is a member of an 3-Tax-Year Period Ending With the Preceding
aggregate group determines its gross receipts and base erosion
percentage as if it were 1 person, on the basis of its aggregate Tax Year
group. A taxpayer is a member of an aggregate group if it A taxpayer that falls within the definition of Who Must File,
belongs to a controlled group of corporations. The term earlier, and is filing Form 8991 should complete lines 1a through
“controlled group of corporations” has the meaning given by 1g to determine their average annual gross receipts for the
section 1563(a) except that: 3-tax-year period ending with the preceding tax year.
1. “More than 50%” is substituted for “at least 80%” each For purposes of determining average annual gross receipts, a
place it appears in section 1563(a), and foreign corporation's gross receipts are included only when such
2. The determination of the controlled group of corporations gross receipts are taken into account when determining the
is made without regard to sections 1563(a)(4) and (e)(3)(C). foreign corporation's income effectively connected with a U.S.
trade or business (“ECI”). If the foreign corporation is subject to
Foreign corporations are excluded from an aggregate group tax on a net basis pursuant to a U.S. income tax treaty, only
except to the extent the foreign corporation has income gross receipts that are attributable to transactions taken into
effectively connected with the conduct of a trade or business in account in determining the foreign corporation's net taxable
the United States or income taken into account in determining income are included in the gross receipts determination.
net taxable income using an income tax treaty.
An aggregate group is determined for each taxpayer. A Line 1a. Enter in column (a) your gross receipts for the first
taxpayer that is a member of an aggregate group determines its preceding tax year. Enter in column (b) your gross receipts for
gross receipts and base erosion percentage on the basis of its the second preceding tax year. Enter in column (c) your gross
aggregate group by taking into account the gross receipts, base receipts for the third preceding tax year.
erosion payments, base erosion tax benefits, and deductions of 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
Instructions for Form 8991 (Rev. 12-2023) -3-

- 4 -

Enlarge image

Page 4 of 9 Fileid: … ns/i8991/202312/a/xml/cycle05/source 7:18 - 6-Dec-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

as 1 person under the aggregation rules of Regulations section Line 2d. Enter the aggregate amount paid or accrued with
1.59A-2(c) which should be reported on line 1c. See the respect to expatriated entities that results in a reduction of the
instructions for line 1c, later. gross receipts of the taxpayer.
Line 1b. Enter in column (a) gross receipts from partnerships Line 2f. Enter the amount from Schedule A, line 5b.
for the first preceding tax year. Enter in column (b) gross receipts
from partnerships for the second preceding tax year. Enter in Line 2g. Enter the amount from Schedule A, line 9b.
column (c) gross receipts from partnerships for the third Line 2h. Enter the aggregate amount of deductions allowed
preceding tax year. under sections 172, 245A, and 250.
A filer must report total ECI gross receipts from Schedule K-3 Line 2i. If an election is made to waive deductions in
(Form 1065), Part IX, Section 1, lines 2–4, column (b), received accordance with Regulations section 1.59A-3(c)(6)(i); check the
from partnerships in which the taxpayer holds partnership “Yes” box on line 2i; complete Schedule B, Waiver of Deductions;
interests. and enter the amount from line 15 of Schedule B. If the taxpayer
Line 1c. Enter in column (a) gross receipts of all other persons is a member of an aggregate group, and another member of the
treated as 1 person under the aggregation rules of Regulations aggregate group has also made the election to waive deductions
section 1.59A-2(c) (the “aggregate gross receipts”) for the first as described above, also include the amount of the member's
preceding tax year. Enter in column (b) the aggregate gross waived deductions in line 2i. See Schedule B, later.
receipts for the second preceding tax year. Enter in column (c) Line 2j. Enter the aggregate amount of deductions for exchange
the aggregate gross receipts for the third preceding tax year. Do losses from section 988 transactions described in Regulations
not include on line 1c gross receipts that have already been section 1.59A-2(e)(3)(ii)(D).
included on line 1a.
Line 2k. Enter the aggregate amount of deductions for TLAC
Line 1f. If the taxpayer was not in existence for the entire 3-year securities and foreign TLAC securities described in Regulations
period referenced in columns (a), (b), and (c), the taxpayer must section 1.59A-2(e)(3)(ii)(E).
determine a gross receipts average for the period that it was in
existence (which includes the current year's gross receipts). See Line 2l. Enter the aggregate amount of reinsurance losses
Regulations section 1.59A-2(d)(2) for further information. incurred and claims payments described in Regulations section
1.59A-2(e)(3)(ii)(F).
Line 1g. If you check “No” on line 1g, you are not subject to the
section 59A tax on base erosion payments of taxpayers with Line 2p. If you check “No” for line 2p, you are not subject to the
substantial gross receipts. Do not complete the remaining lines. tax on base erosion payments of taxpayers with substantial
Attach Form 8991 to your tax return. gross receipts. Skip Parts II-IV. Complete Part V and Schedule A.
If you check “Yes” on line 1g, continue to line 2a. Complete Schedule B if necessary. Do not complete
Schedule C. Attach Form 8991 and the completed Schedule A
Base Erosion Percentage for the Tax Year (and, if applicable, Schedule B) to your tax return.
Complete lines 2a through 2o to determine your base erosion If you check “Yes” for line 2p, continue to Part II.
percentage for the tax year. See the definition of aggregation
rules, earlier, for information on how to determine the base Part II—Modified Taxable Income
erosion percentage for an aggregate group. If the taxpayer is not See Regulations section 1.59A-4 for further details on how to
a member of an aggregate group, the taxpayer should enter its determine modified taxable income.
own amounts in lines 2a through 2o. Line 3a. Enter the amount of taxable income after any net
A taxpayer is subject to the 2% base erosion percentage operating loss.
threshold if it or any member of its aggregate group is a member If the current year reports a loss, without any net operating
of an affiliated group (as defined in section 1504(a)(1)) that loss carryovers, the amount entered here may be less than zero.
includes a bank (as defined in section 581) or a registered If the current year reports taxable income and there is a net
securities dealer (as defined in Regulations section 1.59A-1(b) operating loss carryover that would reduce taxable income
(15)). below zero, enter “-0-.” Do not enter an amount less than zero.
Line 2a. Enter the amount of base erosion tax benefits from Line 3b. Enter the amount of base erosion tax benefits for the
Schedule A, line 15, column (a-2). tax year with respect to base erosion payments from
Line 2b. Enter the aggregate amount of deductions allowed Schedule A, line 15, column (b-2).
under chapter 1 (sections 1 through 1400) for the tax year. The Line 3c. Enter the amount of net operating loss deduction to be
amount entered should be the aggregate deductions allowed to added back to taxable income for purposes of determining
all persons that are treated as 1 person under the aggregation modified taxable income. To calculate this amount, first
rules. Do not include amounts reported on line 2c (reinsurance determine the amount of net operating loss deduction allowed
payments) or amounts reported on line 2d (payments to under section 172 that does not exceed taxable income before
expatriated entities). taking into account the net operating loss deduction for all
Line 2c. For reinsurance payments paid or accrued that are applicable tax years. Second, multiply this net operating loss
base erosion payments described in Regulations section deduction by the base erosion percentage for the tax year in
1.59A-3(b)(1)(iii), enter the aggregate amount of: which the net operating loss arose. If the net operating loss
• Any reduction under section 803(a)(1)(B) in the gross amount deduction is attributable to net operating losses that arose in
of premiums and other consideration on insurance and annuity more than one tax year, multiply the net operating loss
contracts for premiums and other consideration arising out of attributable to each tax year by the base erosion percentage for
indemnity insurance, and that tax year and determine the total amount by adding the result
• Any deduction under section 832(b)(4)(A) from the amount of from each tax year. For any tax year beginning before 2018, the
gross premiums written on insurance contracts during the tax base erosion percentage is zero.
year for premiums paid for reinsurance. Line 3d. Combine the amounts on lines 3a through 3c.

-4- Instructions for Form 8991 (Rev. 12-2023)

- 5 -

Enlarge image

Page 5 of 9 Fileid: … ns/i8991/202312/a/xml/cycle05/source 7:18 - 6-Dec-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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

Instructions for Form 8991 (Rev. 12-2023) -5-

- 6 -

Enlarge image

Page 6 of 9         Fileid: … ns/i8991/202312/a/xml/cycle05/source                                          7:18 - 6-Dec-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Line 1 and line 2. These lines are reserved and should not be             paid or accrued to a foreign related party for the purchase of 
used at this time.                                                        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 
                                                                          component.
Line 6, columns (a-1) and (b-1). Enter the amount of all 
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 2022-30, for tax years 
Line 6, columns (a-2) and (b-2). Enter the amount of                      beginning on or after January 1, 2025, 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 
Line 7, columns (a-2) and (b-2). Enter the amount of                      expanded affiliated group, as defined in section 7874(c)(1), as 
deductions allowed under chapter 1 for the tax year for amounts           the surrogate foreign corporation. A surrogate foreign 

                                                                      -6-                    Instructions for Form 8991 (Rev. 12-2023)

- 7 -

Enlarge image

Page 7 of 9 Fileid: … ns/i8991/202312/a/xml/cycle05/source 7:18 - 6-Dec-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

corporation is defined in section 7874(a)(2)(B), but does not party. Only include those amounts that have not otherwise been
include a foreign corporation that is treated as a domestic included in Schedule A on lines 3 through 10.
corporation under section 7874(b).
Attach a statement for line 11. For amounts reported on
Line 10, columns (a-2) and (b-2). Enter the amount of the line 11, attach a statement describing the type and amount of
reduction to gross receipts with respect to payments to other payments, using the same column headings as specified in
expatriated entities that were used to compute gross income for Schedule A: “Aggregate Group's Base Erosion Payments,”
the tax year. “Aggregate Group's Base Erosion Tax Benefits,” “Taxpayer's
Base Erosion Payments,” and “Taxpayer's Base Erosion Tax
Line 11, columns (a-1) and (b-1). Enter the total amount of
Benefits.” For each type of payment, the attachment must
any other base erosion payments that were paid or accrued to a
identify the relationship of the recipients consistent with the
foreign related party and for which a deduction is allowable
categories and instructions for columns (c), (d), and (e) of
under chapter 1. Only include those amounts that have not
Schedule A.
otherwise been included in Schedule A on lines 3 through 10.
Line 12. For columns (a-1), (a-2), (b-1), and (b-2), add lines 3
Line 11, columns (a-2) and (b-2). Enter the amount of
through 11 and enter the total amount.
deductions allowed under chapter 1 for the tax year for other
base erosion payments paid or accrued to a foreign related

Instructions for Form 8991 (Rev. 12-2023) -7-

- 8 -

Enlarge image

Page 8 of 9 Fileid: … ns/i8991/202312/a/xml/cycle05/source 7:18 - 6-Dec-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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.

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 3 through 11 on withholding rate pursuant to a U.S. income tax treaty.
which tax is imposed under section 871(a) or section 881, and Column C. Enter the treaty-reduced withholding tax rate to
with respect to which tax has been deducted and withheld under which the base erosion tax benefit is subject.
section 1442 at a 30% rate.
Column D. Divide the tax rate in column C by 30% (0.30).
Line 14. Complete the worksheet above to determine the Round to four decimal places.
portion of the base erosion tax benefits from lines 3 through 11
on which tax is imposed under section 871 or section 881, and Column E. Multiply the amount in column B by column D. The
with respect to which tax has been deducted and withheld at a amount is the portion of base erosion tax benefits with respect to
reduced withholding rate (but not exempt from tax) pursuant to a the specific type of base erosion payment and the specific
U.S. income tax treaty. The amount to be entered on line 14 is treaty-reduced rate of withholding that is not taken into account
the same proportion of such base erosion tax benefits as the in computing modified taxable income. Add the amounts in
reduced rate of tax specified by the relevant treaty bears to the column E and enter the total on Schedule A, line 14, column
rate of tax imposed without regard to the treaty. Complete a (a-2) or (b-2).
separate worksheet for column (a-2) amounts and column (b-2)
amounts on line 14, as necessary. Keep a copy of the completed Schedule B—Waiver of Deductions
worksheet for your records. Schedule B is used to report all the deductions being waived for
the tax year in accordance with Regulations section 1.59A-3(c)
Line 15. Subtract the sum of line 13 and line 14 from line 12, (6)(i). Columns (a) through (i) are to be completed for each item
and enter the amount on line 15. Line 15, column (a-2), is the or property of which a deduction related to such item or property
total amount of aggregate base erosion tax benefits for the tax is being waived.
year that is used for purposes of determining the taxpayer's base
erosion percentage. Line 15, column (b-2), is the total amount of You should use lines 1 through 13 to report only your
base erosion tax benefits for the tax year that is used for ! own deductions that you are electing to waive. If a
purposes of determining the taxpayer's modified taxable income. CAUTION member or members of your aggregate group has also
Line 15, column (b-2), is also the total amount of base erosion elected to waive any of its deductions, complete a separate
tax benefits for the tax year that is used for purposes of attachment for each member of the aggregate group that is
determining the taxpayer's base erosion percentage when the waiving deductions which contains the name and EIN of the
taxpayer is not a member of an aggregate group. aggregate group member and the information shown in columns
(a) through (i). Attach each attachment to Schedule B. Include
Instructions for Worksheet for Schedule A, the total amount of the deductions being claimed by all of your
Line 14, Columns (a-2) and (b-2) aggregate group members with respect to the items or property
that their respective waiver elections relate to on line 14, column
General (h) and the total of all of the deductions being waived by the
members on line 14, column (i). See the instructions for line 14,
Use a separate row for each type of base erosion payment and later.
each treaty-reduced withholding tax rate to which the
corresponding base erosion tax benefit is subject. Column (a). Enter a brief description of the item or property to
which the deduction relates to; for example, debt instrument,
Do not include a base erosion tax benefit that is subject to the intangible property (such as patent, trademark, or license),
30% statutory withholding tax rate or a base erosion tax benefit personal property, real property, etc.
that is exempt from tax pursuant to relevant income tax treaty Column (b). Enter the date on which, or the time period which
provisions. the waived deduction was paid or accrued.
Do not combine the base erosion tax benefits that are subject Column (c). Enter the provision of the Code (and regulations,
to different withholding rates. Do not enter any blended as applicable) that allows the deduction for the item or property
withholding tax rates. to which the election relates.
Column A. Enter the type of base erosion payment that Column (d). Enter the schedule and line number of the
corresponds to the type of base erosion payment in Schedule A. controlled group's federal income tax return where the deduction
is reflected (or would have been reflected).
Column B. Enter the amount of base erosion tax benefits that
correspond to the specific type of base erosion payment on
which tax is imposed under section 871 or section 881, and with

-8- Instructions for Form 8991 (Rev. 12-2023)

- 9 -

Enlarge image

Page 9 of 9  Fileid: … ns/i8991/202312/a/xml/cycle05/source                                                   7:18 - 6-Dec-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Column (e). Enter the name of the foreign related party that is           the earliest earned credits first. Therefore, the order in which the 
or will be the recipient of the payment that generates the                credits are used in any tax year is:
deduction.                                                                •   Carryforwards to that year, the earliest ones first;
                                                                          •   The general business credit earned in that year; and
Column (f). Enter the tax identification number of the foreign            •   The carryback to that year.
related party payee that was entered in column (e). This can be 
                                                                              If your general business credits exceed your tax liability limit, 
an EIN, ITIN, or Foreign Tax Identification Number (FTIN).
                                                                          the credits are used in the order as they are listed in section 
Column (g). Enter the country of organization of the foreign              38(b). Although general business credits are aggregated on 
related party that was entered in column (e).                             Form 3800, you should have a separate record of each credit.
Column (h). For each item or property reported under columns              Line 5. Section 59A(b)(1)(B)(ii)(II) limits the allowable 
(a) through (g), enter the amount of the deduction claimed on the         adjustment for applicable section 38 credits to 80% of the lesser 
tax return (after the waiver indicated in column (i)).                    of applicable section 38 credits or the BEMTA computed without 
Column (i). For each item or property reported under columns              the adjustment for applicable section 38 credits computed in Part 
(a) through (g), enter the amount of the deduction being waived.          III.

Line 14. If additional space is necessary, complete and attach a          Part II—Applicable Section 38 Credits
separate worksheet with the same information as shown under 
columns (a) through (i) for each additional item or property. Enter       Line 8. Enter the total amount of low-income housing credit 
the total of deductions claimed for the tax year on line 14,              shown on Form 3800, Part III, line 4d, columns (e) and (f); and 
column (h) and the total of deductions waived on line 14, column          Part IV, line 2b, column (f) and line 4d, columns (e) and (f). This 
(i).                                                                      total equals the available credit for low-income housing in the tax 
                                                                          year.
Also include on this line the total of deductions being claimed 
(column (h)) and waived (column (i)) from other taxpayers that            Line 9. Enter the total amount of section 45 credit shown on 
are members of your aggregate group, if applicable.                       Form 3800, Part III, line 1f (combine columns (e), (f), and (g)); 
                                                                          Part III, line 4e (combine columns (e), (f), and (g)); Part IV, line 1f, 
Schedule C—Credits Reducing                                               columns (e) and (f); and Part IV, line 4e, columns (e) and (f). This 
                                                                          total equals the available credit for renewable electricity 
Regular Tax Liability in Computing                                        production in the tax year.
Base Erosion Minimum Tax Amount                                           Line 10. Enter only the total amount of investment credit 
                                                                          allocable to the section 48 energy credit shown on Form 3800, 
(BEMTA)                                                                   Part III, line 4a (combine columns (e), (f), and (g)); and Part IV, 
                                                                          line 4a, columns (e) and (f). This total equals the available 
Part I—Credits Allowed Against Regular Tax                                investment credit properly allocable to the energy credit in the 
Line 1. You must enter the total credits allowed against your             tax year.
regular tax liability in the tax year, except for credits allowed         Line 11. Enter only that portion of the available applicable 
under sections 33, 37, and 53. Total credits include the sum of all       credits which was included on Form 3800, Part II, line 38, and 
credits shown on Form 1120 or other applicable return.                    used against regular tax liability. This represents the amount of 
Line 2. Enter the total amount of credit for increasing research          applicable credits allowed against regular tax liability in the 
activities reported on Form 3800, Part III, line 1c, columns (e)          current year. Refer to the ordering rules described in the earlier 
and (f), plus Part IV, line 1c, columns (e) and (f). This total equals    instructions for Schedule C, line 3.
the available credit for increasing research activities in the tax 
year.                                                                     Part III—BEMTA Determined Without Adjustment 
                                                                          for Applicable Section 38 Credits
Line 3. Enter only that portion of the available credit for 
increasing research activities which was included on Form 3800,           Line 15. Subtract line 14 from line 13. If zero or less, enter “-0-.”
Part II, line 38, and used against regular tax liability. You must 
                                                                          Line 16. You must compute the BEMTA without adjustment for 
apply the general rules and the ordering rules for use of general 
                                                                          applicable section 38 credits to allow computation of the 
business credits from the Instructions for Form 3800. The                 limitation of applicable section 38 credits on lines 4 and 5 of Part 
Instructions for Form 3800 provide that credits reported on Form 
                                                                          I.
3800 are treated as used on a first-in, first-out basis by offsetting 

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. 12-2023)                              -9-

PDF file checksum: 1066223716

(Plugin #1/9.12/13.0)