Does BEAT apply to my foreign-owned U.S. corporation that pays royalties to its parent?
I'm the tax director of a U.S. corporation wholly owned by a Japanese parent company. We pay substantial royalties and management fees to our parent — about $80 million per year. Our total deductions are around $900 million. Our consolidated group has about $2 billion in gross receipts. Are we subject to BEAT? How do I determine if the base erosion percentage test is met?
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