Wall Street Journal Quotes David Rosenbloom: Companies Hope to Beat a New Tax Called the BEAT

The BEAT is the Base Erosion and Anti-Abuse Tax, a complex minimum tax meant to prevent the world’s biggest corporations from shifting profits from the U.S. to other countries. Turned from idea into law last year as part of the tax-code revamp, the BEAT is now frustrating corporate executives and spurring fresh tax-avoidance strategies.

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Another possible tactic: Companies could argue the BEAT violates tax treaties by taking away deductions, said David Rosenbloom, an international tax attorney at Caplin & Drysdale in Washington. In that case, they would claim the deductions and fight the IRS.

At some level, the BEAT imposes a penalty for routing transactions through the U.S. “The only law that’s never going to be repealed is the law of unintended consequences, and this is going to transfer jobs abroad,” Mr. Rosenbloom said.

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Excerpt taken from the article “Companies Hope to Beat a New Tax Called the BEAT” by Richard Rubin for The Wall Street Journal.