Form 8991 BEAT Threshold Guide for Cross-Border Corporations (2025-2026)
Corporate return flow (Form 1120)
How a C corporation reports income and computes its tax.
Determine corporate status
Default for corporations, or via a Form 8832 election.
Prepare Form 1120
Report income, deductions, and credits for the year.
Compute and pay tax
Apply the corporate rate and any estimated-tax payments.
File by the deadline
Submit by the corporate return due date.
Key Takeaways
- BEAT starts with a gross-receipts and base-erosion threshold screen.
- The general tests involve the $500 million gross-receipts measure and a 3% base-erosion percentage.
- Not every cross-border corporation is even in the regime.
- The Form 8991 instructions state a 10.5% BEAT rate for tax years beginning in 2026 or later.
BEAT begins with thresholds, not with a vague fear of foreign payments
The Instructions for Form 8991 say an applicable taxpayer is generally a corporation, other than a RIC, REIT, or S corporation, whose aggregate group meets the gross-receipts test and the base-erosion test. The gross-receipts test is generally at least $500 million over the relevant three-year period, and the base-erosion test is generally 3% or higher, with a 2% threshold for certain banks and securities dealers.
The threshold screen matters more than many mid-size corporations admit
Founders and finance teams sometimes spend time debating whether ordinary related-party service fees are 'base erosion payments' before asking whether the corporation is even large enough to be in the BEAT regime. Form 8991 starts the analysis in the opposite direction. First test size and base-erosion percentage. Then move into detailed payment analysis.
The rate question changed for 2026 and later years
The 2025 Instructions for Form 8991 say the base erosion minimum tax amount uses a 10.5% rate for tax years beginning during 2026 or later, subject to a higher rate for certain banking or securities-dealer groups. That is the kind of year-specific point that should be checked against the current instructions each filing season.
Frequently Asked Questions
Does any corporation paying related foreign parties need Form 8991?
No. IRS instructions first require the taxpayer to meet the applicable gross-receipts and base-erosion thresholds.
What is the main gross-receipts threshold for BEAT?
The Form 8991 instructions generally use average annual gross receipts of at least $500 million for the relevant period.
What BEAT rate do the current instructions give for 2026 and later years?
The 2025 Instructions for Form 8991 say the rate is generally 10.5% for tax years beginning during 2026 or later.
Listen on Spotify
Money & Tax Talk with Rippa — 5/5 rating
Need Help Filing?
Contact us with your situation and we'll point you to the right path
Never miss an IRS deadline
Get free email reminders for Form 5472, state annual reports, quarterly estimated tax, and OBBBA rule changes — built for foreign-owned LLC owners. No spam. Unsubscribe anytime.
We respect your privacy. No spam, ever.
Need to file your foreign-owned LLC return?
Skip the CPA bill. Our guided wizard builds your IRS-ready filing package, step by step.
Includes its walkthrough video pack
Start filing →
Ask the AI tools, free
Tax Return Drafter, Catch-Up Planner, Form Reviewer, IRS Notice Decoder — purpose-built AI tools, no signup needed.
Free tier · BYOK Anthropic/OpenAI for power use
Browse tools →
Starting your foreign-owned LLC?
Vetted partners we use ourselves: doola & Firstbase for formation, Mercury for banking, Alohi for IRS faxing.
No-fluff recommendations, no Northwest
See partners →
More on GILTI, Subpart F & BEAT
Form 5471 Category 4 vs Category 5 Guide
Form 5471 Category 4 vs Category 5 Guide for U.S. Shareholders (2025-2026)
Controlled Foreign Corporation 50% Test Guide
Controlled Foreign Corporation 50% Test Guide (2025-2026)
Form 5471 Constructive Ownership Relief Guide
Form 5471 Constructive Ownership Relief Guide (2025-2026)
Form 8858 FDE vs Foreign Branch Guide
Form 8858 FDE vs Foreign Branch Guide (2025-2026)
Form 926 Outbound Transfer Guide
Form 926 Outbound Transfer Guide for U.S. Persons (2025-2026)
Form 8992 GILTI Basics Guide