Instructions for Form 8991

Instructions for Form 8991

(Rev. December 2025)

(Use with the December 2024 revision of Form 8991.)

Tax on Base Erosion Payments of Taxpayers With Substantial Gross Receipts

Section references are to the Internal Revenue Code

unless otherwise noted.

Future Developments

For the latest information about developments related to

Form 8991, its schedules, and its instructions, such as

legislation enacted or guidance published after the form

and instructions were issued, go to IRS.gov/Form8991.

Background

The Tax Cuts and Jobs Act of 2017 (P.L. 115-97) added

new section 59A (Tax on Base Erosion Payments of

Taxpayers with Substantial Gross Receipts), which

applies to large corporations that have the ability to reduce

U.S. tax liabilities by making deductible payments to

foreign related parties. The Base Erosion and Anti-Abuse

Tax (BEAT) of section 59A is generally levied on certain

large corporations whose aggregate group satisfies the

“base erosion test” under Regulations section 1.59A-2(e),

generally by having deductions with respect to amounts

paid or accrued to foreign related parties that are 3% or

higher of their total deductions (2% if any member of the

aggregate group is a member of an affiliated group that

includes a bank or registered security dealer). Large

corporations are those whose aggregate group satisfies

the “gross receipts test” of Regulations section

1.59A-2(d), generally by having gross receipts of $500

million or more. The BEAT operates as a minimum tax, so

a taxpayer is only subject to additional tax under the BEAT

if the BEAT tax rate multiplied by the taxpayer’s modified

taxable income exceeds the taxpayer’s regular tax liability

adjusted for certain credits.

On December 6, 2019, the Treasury Department and

the IRS published final regulations (the “final regulations”)

under sections 59A, 383, 1502, and 6038A, and proposed

regulations that propose other regulations under sections

59A and 6031 (“the 2019 proposed regulations”).

On October 9, 2020, the Treasury Department and the

IRS published final regulations (the “2020 final

regulations”) providing additional guidance under sections

59A, 1502, and 6031.

On January 14, 2025, the Treasury Department and the

IRS published proposed regulations (the “2025 proposed

regulations”) providing additional guidance regarding the

BEAT rules for qualified derivative payments on securities

lending transactions under Regulations sections

1.59A-3(b)(2), 1.59A-6(b)(3), and 1.6038A-2(b)(7)(ix).

On July 4, 2025, the One Big Beautiful Bill Act (P.L.

119-21) was enacted, which included amendments to

section 59A. Those amendments are effective for tax

years beginning after 2025.

Jan 12, 2026

On December 18, 2025, the Treasury Department and

the IRS published final regulations (the “2025 final

regulations”) providing additional guidance regarding the

BEAT rules for qualified derivative payments on securities

lending transactions under Regulations sections

1.59A-3(b)(2), 1.59A-6(b)(3), and 1.6038A-2(b)(7)(ix).

Reminders

Schedule A, line 2. A new line 2 has been added to

include payments related to cost-sharing transactions

payments as defined in Regulations section 1.482-7(b)(1)

(i). See Line 2 under Schedule A, for more information.

Corrected Form 8991. If you file a Form 8991 that you

later determine is incomplete or incorrect, file a corrected

Form 8991 with an amended tax return, using the

amended return instructions for the return with which you

originally filed Form 8991. Write “Corrected” at the top of

the form and attach a statement identifying the changes.

Reporting requirements and penalties. P.L. 115-97

also expanded the information reporting requirements

under section 6038A and increased the amount of the

penalty for failure to furnish information or maintain

records under section 6038A(d)(1) and (2) from $10,000

to $25,000. See Form 5472, Information Return of a 25%

Foreign-Owned U.S. Corporation or a Foreign Corporation

Engaged in a U.S. Trade or Business, and its instructions

for further details.

Expenditures charged to capital account. Any

expenditure made by a taxpayer to a foreign related party

that is charged to a capital account under section 174 is a

base erosion payment. The base erosion tax benefit with

respect to that expenditure is the amount of allowed

amortization or deduction for the tax year.

General Instructions

Purpose of Form

Use Form 8991 to determine a taxpayer’s base erosion

minimum tax amount for the year.

Use Schedule A to determine the amount of base

erosion payments and base erosion tax benefits for

purposes of:

• Determining the taxpayer’s base erosion percentage,

and

• Determining the applicable taxpayer’s modified taxable

income.

Use Schedule B to report the amount of deductions

being waived for the tax year.

Instructions for Form 8991 (Rev. 12-2025) Catalog Number 71330Z

Department of the Treasury Internal Revenue Service www.irs.gov

Use Schedule C to determine the credits that reduce

regular tax liability in computing the base erosion

minimum tax amount.

Definitions

Applicable taxpayer. An applicable taxpayer is, with

respect to any tax year, a taxpayer who meets all of the

following criteria.

• The taxpayer is a corporation other than a regulated

investment company (RIC), a real estate investment trust

(REIT), or an S corporation.

• The taxpayer’s aggregate group (or if the taxpayer does

not have an aggregate group, the taxpayer) satisfies the

gross receipts test, generally by having average annual

gross receipts for the 3-tax-year period ending with the

preceding tax year that are at least $500 million.

• The taxpayer’s aggregate group (or if the taxpayer does

not have an aggregate group, the taxpayer) satisfies the

base erosion test, generally by having a base erosion

percentage for 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 section 581) or a registered

securities dealer as defined in Regulations section

1.59A-1(b)(15).

See Regulations section 1.59A-2 for more information

on how to determine whether a taxpayer is an applicable

taxpayer.

Base erosion minimum tax amount. The base erosion

minimum tax amount for the tax year is the excess of 10%

(10.5% for tax years beginning after 2025) of the modified

taxable income of the applicable taxpayer for the tax year

over the applicable taxpayer’s regular tax liability under

section 26(b), reduced (but not below zero) by the excess,

if any, of:

1. The credits allowed under chapter 1 of subtitle A of

the Code (“chapter 1”) against the applicable taxpayer’s

regular tax liability over

2. The sum of:

a. The credit allowed under section 38 that is properly

allocable to the research credit determined under section

41(a), plus

b. The portion of the applicable section 38 credits not

in excess of 80% of the lesser of the amount of the

applicable section 38 credits or the base erosion minimum

tax amount 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 section 581) or a registered securities dealer

(as defined in Regulations section 1.59A-1(b)(15)), the tax

rate in effect for the tax year for the base erosion minimum

tax amount is increased by an additional 1%.

See Regulations section 1.59A-5 for more information

on how to compute the base erosion minimum tax

amount.

Base erosion payment. A base erosion payment is any

amount paid or accrued by a taxpayer to a foreign person

(as defined in Regulations section 1.59A-1(b)(10)) that is

a related party (as defined in Regulations section

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1.59A-1(b)(12)) with respect to which a deduction is

allowable under chapter 1.

The amount paid or accrued, and the identity of the

payor and recipient of the amount paid or accrued, is

determined under general tax principles.

An amount paid or accrued includes an amount paid or

accrued using any form of consideration, such as cash,

property, stock, a partnership interest, or the assumption

of a liability.

Base erosion payments are generally determined on a

gross basis, unless the Code or regulations expressly

permit netting of amounts in determining payments.

For purposes of determining whether a taxpayer has

made a base erosion payment, the taxpayer must treat a

payment to or from a partnership as made to or from each

partner. See Regulations section 1.59A-7 for more

information on how the BEAT applies to partners.

Base erosion payments also include the following.

• Amounts paid or accrued by a taxpayer to a foreign

related party in connection with the acquisition of

depreciable or amortizable property.

• Premiums or other consideration paid or accrued by a

taxpayer to a foreign related party for reinsurance

payments that are taken into account under section 803(a)

(1)(B) or section 832(b)(4)(A).

• Any amount paid or accrued by a taxpayer to a related

party that is a surrogate foreign corporation (if that

corporation first became a surrogate foreign corporation

after November 9, 2017), or a foreign person that is a

member of the same expanded affiliated group as the

surrogate foreign corporation (collectively, “expatriated

entities”), which results in a reduction to gross receipts.

See section 59A(d)(4) for more information.

See Regulations section 1.59A-3 for more information

on the definition of a base erosion payment.

Base erosion payments do not include the following

types of payments made to a foreign person that is a

related party.

• Amounts resulting in a reduction to determine gross

income, such as cost of goods sold.

• Amounts paid or accrued for services if such services

are services that meet the requirements for eligibility for

use of the services cost method under section 482

(determined without regard to the requirement that the

services not contribute significantly to the fundamental

risks of business success or failure), but only to the extent

of the total services cost of those services. The mark-up

component paid or accrued to a foreign related party is a

base erosion payment.

• Qualified derivative payments. A qualified derivative

payment is a payment made by a taxpayer pursuant to a

derivative with respect to which the taxpayer (a)

recognizes gain or loss as if the derivative were sold for its

fair market value on the last business day of the tax year

and any additional times required by the taxpayer’s

method of accounting, (b) treats the recognized gain or

loss as ordinary, and (c) treats the character of all

payments made with respect to the derivative as ordinary.

A payment is not a qualified derivative payment if the

payment is properly allocable to a non-derivative

component of a contract or if the payment would be

Instructions for Form 8991 (Rev. 12-2025)

treated as a base erosion payment if it were not made

pursuant to a derivative, such as an interest, royalty, or

services payment.

• Effectively connected income and income taken into

account in U.S. taxable income under an income tax

treaty.

1. Amounts paid or accrued that are subject to U.S.

federal income taxation as income that is effectively

connected to a U.S. trade or business if the taxpayer

receives a withholding certificate with respect to the

income.

2. If the foreign related party determines its taxable

income applying the business profits provisions of an

income tax treaty, amounts paid or accrued to the foreign

related party that are taken into account in determining its

taxable income.

• Exchange loss from section 988 transactions.

• Certain deductions for amounts paid or accrued with

respect to certain total loss absorbing capacity (TLAC)

securities and certain foreign TLAC securities.

• Amounts transferred in connection with certain

specified nonrecognition transactions. See Regulations

section 1.59A-3(b)(3)(viii) for more information.

• Amounts paid by the taxpayer to a regulated foreign

insurance company under a reinsurance contract for

reinsurance losses incurred or claims payments that are

ultimately paid by the foreign insurance company to an

unrelated party.

See Regulations section 1.59A-3(b)(3)(i)–(ix) for further

information on whether a payment or accrual is not a base

erosion payment.

Related party. A related party is:

• Any 25% owner of the taxpayer (as defined in

Regulations section 1.59A-1(b)(17)(ii)),

• Any person who is related (within the meaning of

section 267(b) or 707(b)(1)) to the taxpayer or any 25%

owner of the taxpayer, or

• A controlled taxpayer within the meaning of section

1.482-1(i)(5) together with, or with respect to, the

taxpayer.

Section 318, with certain modifications, applies in

determining whether a person is a related party. See

Regulations section 1.59A-1(b)(17)(iii) for additional rules

relating to the modification of section 318 for use in

determining a person’s relatedness.

Base erosion tax benefit. Generally, a base erosion tax

benefit is any deduction that is allowed under chapter 1 for

the tax year for any base erosion payment. Base erosion

tax benefits also include any deductions allowed for the

tax year for depreciation or amortization with respect to

the property acquired with a base erosion payment (that

are paid or accrued in tax years beginning after 2017).

Base erosion tax benefits also include certain reductions

in the gross amount of premiums and other consideration

on insurance and annuity contracts, or any deduction from

the amount of gross premiums written on insurance

contracts during the tax year for premiums paid for

reinsurance, and payments to certain expatriated entities

(as defined under Base erosion payment, earlier) that

cause a reduction in gross receipts in computing gross

income of the taxpayer for the tax year.

Instructions for Form 8991 (Rev. 12-2025)

See the instructions for Schedule A, later, for special

rules applicable in determining the amount of the base

erosion tax benefit when taxes have been imposed by

section 871 or 881 and withheld under section 1441 or

1442 on a base erosion payment; or when the taxpayer

has made an interest payment that gives rise to a base

erosion tax benefit and section 163(j) applies for the tax

year.

Base erosion percentage. The base erosion

percentage of the taxpayer’s aggregate group (or if the

taxpayer does not have an aggregate group, the taxpayer)

is determined by dividing:

1. The aggregate amount of base erosion tax benefits

for the tax year (numerator) by

2. The aggregate amount of allowed deductions and

base erosion tax benefits (denominator). The denominator

excludes the following deductions.

a. Any deduction allowed under sections 172, 245A,

or 250.

b. Any deduction for amounts paid or accrued for

services to which the exception under Regulations section

1.59A-3(b)(3)(i) for the section 482 services cost method

applies.

c. Any deduction for qualified derivative payments that

are not treated as base erosion payments as a result of

Regulations section 1.59A-3(b)(3)(ii).

d. Exchange loss from section 988 transactions that is

not a base erosion payment as a result of the exception

under Regulations section 1.59A-3(b)(3)(iv).

e. Any deduction for amounts paid or accrued to

foreign related parties with respect to TLAC securities and

foreign TLAC securities that are not treated as base

erosion payments as a result of Regulations section

1.59A-3(b)(3)(v).

f. Any reinsurance losses incurred or claims payments

that are not treated as base erosion payments as a result

of the exception under Regulations section 1.59A-3(b)(3)

(ix).

g. Any deduction not allowed in determining taxable

income.

See Regulations section 1.59A-2(e)(3) for further

information on how to compute the base erosion

percentage.

Modified taxable income. Modified taxable income is

the applicable taxpayer’s taxable income plus any base

erosion tax 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.

See Regulations section 1.59A-4(b) for further

information on the computation of modified taxable

income.

Applicable section 38 credits. Applicable section 38

credits are the credits allowed under section 38 for the tax

year that are properly allocable to:

• The low-income housing credit determined under

section 42(a);

• The renewable electricity production credit determined

under section 45(a); and

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• The investment credit determined under section 46, but

only to the extent properly allocable to the energy credit

determined under section 48.

See also the instructions for Schedule C, later.

Aggregation rules. When applying the gross receipts

test and base erosion percentage test, a taxpayer that is a

member of an aggregate group determines its gross

receipts and base erosion percentage as if it were one

person, on the basis of its aggregate group. A taxpayer is

a member of an aggregate group if it belongs to a

controlled group of corporations. The term “controlled

group of corporations” has the meaning given by section

1563(a) except that:

1. “More than 50%” is substituted for “at least 80%”

each place it appears in section 1563(a), and

2. The determination of the controlled group of

corporations is made without regard to sections 1563(a)

(4) and (e)(3)(C).

Foreign corporations are excluded from an aggregate

group except to the extent the foreign corporation has

income effectively connected with the conduct of a trade

or business in the United States or income taken into

account in determining net taxable income using an

income tax treaty.

An aggregate group is determined for each taxpayer. A

taxpayer that is a member of an aggregate group

determines its gross receipts and base erosion

percentage on the basis of its aggregate group by taking

into account the gross receipts, base erosion payments,

base erosion tax benefits, and deductions of the members

of the aggregate group for the tax years that end with or

within the taxpayer’s tax year.

See Regulations section 1.59A-2(c) for further

information on how to apply the aggregation rules.

Who Must File

Any corporation, other than a RIC, a REIT, or an S

corporation, that has (or is a member of an aggregate

group that has) annual gross receipts of at least $500

million in 1 or more of the 3 preceding tax years ending

with the preceding tax year must file Form 8991.

See Form 8991, Part I, lines 1a through 1g, and

Specific Instructions, later, to determine whether the

corporation has gross receipts of at least $500 million in 1

or more of the 3 preceding tax years.

See also questions/items and related instructions in the

following forms.

• Question 22, Schedule K, Form 1120.

• Item DD, Form 1120-F.

• Question 14, Schedule M, Form 1120-L.

• Question 15, Schedule I, Form 1120-PC.

• Question 16, Schedule K, Form 1120-C.

When To File

Attach Form 8991 to your income tax return (or, if

applicable, exempt organization business income tax

return) and file by the due date (including extensions) for

that return.

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Specific Instructions

Note: Complete every applicable entry space on Form

8991. Do not enter “See Attached” or “Available Upon

Request” instead of completing the entry spaces. If more

space is needed on the forms or schedules, attach

separate sheets using the same size and format as the

printed forms.

If there are supporting statements and attachments,

arrange them in the same order as the schedules or forms

they support and attach them last. Show the totals on the

printed forms. Enter the filer’s name and employer

identification number (EIN) on each supporting statement

or attachment.

Part I—Applicable Taxpayer

Determination

Average Annual Gross Receipts for the

3-Tax-Year Period Ending With the Preceding

Tax Year

A taxpayer that falls within the definition of Who Must File,

earlier, and is filing Form 8991 should complete lines 1a

through 1g to determine their average annual gross

receipts for the 3-tax-year period ending with the

preceding tax year.

For purposes of determining average annual gross

receipts, a foreign corporation’s gross receipts are

included only when such gross receipts are taken into

account when determining the foreign corporation’s

income effectively connected with a U.S. trade or business

(“ECI”). If the foreign corporation is subject to tax on a net

basis pursuant to a U.S. income tax treaty, only gross

receipts that are attributable to transactions taken into

account in determining the foreign corporation’s net

taxable income are included in the gross receipts

determination.

Line 1a. Enter in column (a) your gross receipts for the

first preceding tax year. Enter in column (b) your gross

receipts for the second preceding tax year. Enter in

column (c) your gross receipts for the third preceding tax

year.

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 as one person under the aggregation

rules of Regulations section 1.59A-2(c), which should be

reported on line 1c. See the instructions for line 1c, later.

Line 1b. Enter in column (a) gross receipts from

partnerships for the first preceding tax year. Enter in

column (b) gross receipts from partnerships for the

second preceding tax year. Enter in column (c) gross

receipts from partnerships for the third preceding tax year.

A filer must report total ECI gross receipts from

Schedule K-3 (Form 1065), Part IX, Section 1, lines 2–4,

column (b), received from partnerships in which the

taxpayer holds partnership interests.

Line 1c. Enter in column (a) gross receipts of all other

persons treated as one person under the aggregation

rules of Regulations section 1.59A-2(c) (the “aggregate

gross receipts”) for the first preceding tax year. Enter in

Instructions for Form 8991 (Rev. 12-2025)

column (b) the aggregate gross receipts for the second

preceding tax year. Enter in column (c) the aggregate

gross receipts for the third preceding tax year. Do not

include on line 1c gross receipts that have already been

included on line 1a.

Line 1f. If the taxpayer was not in existence for the entire

3-year period referenced in columns (a), (b), and (c), the

taxpayer must determine a gross receipts average for the

period that it was in existence (which includes the current

year’s gross receipts). See Regulations section

1.59A-2(d)(2) for further information.

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 substantial gross receipts. Do not complete

the remaining lines. Attach Form 8991 to your tax return.

If you check “Yes” on line 1g, continue to line 2a.

Base Erosion Percentage for the Tax Year

Complete lines 2a through 2o to determine your base

erosion percentage for the tax year. See the definition of

aggregation rules, earlier, for information on how to

determine the base erosion percentage for an aggregate

group. If the taxpayer is not a member of an aggregate

group, the taxpayer should enter its own amounts in lines

2a through 2o.

A taxpayer is subject to the 2% base erosion

percentage threshold if it or any member of its aggregate

group is a member of an affiliated group (as defined in

section 1504(a)(1)) that includes a bank (as defined in

section 581) or a registered securities dealer (as defined

in Regulations section 1.59A-1(b)(15)).

Line 2a. Enter the amount of base erosion tax benefits

from Schedule A, line 15, column (a-2).

Line 2b. Enter the aggregate amount of deductions

allowed under chapter 1 (sections 1 through 1400) for the

tax year. The amount entered should be the aggregate

deductions allowed to all persons that are treated as one

person under the aggregation rules. Do not include

amounts reported on line 2c (reinsurance payments) or

amounts reported on line 2d (payments to expatriated

entities).

Line 2c. For reinsurance payments paid or accrued that

are base erosion payments described in Regulations

section 1.59A-3(b)(1)(iii), enter the aggregate amount of:

• Any reduction under section 803(a)(1)(B) in the gross

amount of premiums and other consideration on

insurance and annuity contracts for premiums and other

consideration arising out of indemnity insurance, and

• Any deduction under section 832(b)(4)(A) from the

amount of gross premiums written on insurance contracts

during the tax year for premiums paid for reinsurance.

Line 2d. Enter the aggregate amount paid or accrued

with respect to expatriated entities that results in a

reduction of the gross receipts of the taxpayer.

Line 2f. Enter the amount from Schedule A, line 5b.

Line 2g. Enter the amount from Schedule A, line 9b.

Line 2h. Enter the aggregate amount of deductions

allowed under sections 172, 245A, and 250.

Instructions for Form 8991 (Rev. 12-2025)

Line 2i. If an election is made to waive deductions in

accordance with Regulations section 1.59A-3(c)(6)(i),

check the “Yes” box on line 2i; complete Schedule B,

Waiver of Deductions; and enter the amount from line 15

of Schedule B. If the taxpayer is a member of an

aggregate group, and another member of the aggregate

group has also made the election to waive deductions as

described above, also include the amount of the

member’s waived deductions in line 2i. See Schedule B,

later.

Line 2j. Enter the aggregate amount of deductions for

exchange losses from section 988 transactions described

in Regulations section 1.59A-2(e)(3)(ii)(D).

Line 2k. Enter the aggregate amount of deductions for

TLAC securities and foreign TLAC securities described in

Regulations section 1.59A-2(e)(3)(ii)(E).

Line 2l. Enter the aggregate amount of reinsurance

losses incurred and claims payments described in

Regulations section 1.59A-2(e)(3)(ii)(F).

Line 2p. If you check “No” for line 2p, you are not subject

to the tax on base erosion payments of taxpayers with

substantial gross receipts. Skip Parts II–IV. Complete Part

V and Schedule A. Complete Schedule B if necessary. Do

not complete Schedule C. Attach Form 8991 and the

completed Schedule A (and, if applicable, Schedule B) to

your tax return.

If you check “Yes” for line 2p, continue to Part II.

Part II—Modified Taxable Income

(MTI)

See Regulations section 1.59A-4 for further details on how

to determine modified taxable income.

Line 3a. Enter the amount of taxable income after any net

operating loss and special deductions.

If the current year reports a loss, without any net

operating loss carryovers, the amount entered here may

be less than zero.

If the current year reports taxable income and there is a

net operating loss carryover that would reduce taxable

income below zero, enter “-0-.” Do not enter an amount

less than zero.

Line 3b. Enter the amount of base erosion tax benefits for

the tax year with respect to base erosion payments from

Schedule A, line 15, column (b-2).

Line 3c. Enter the amount of net operating loss

deduction to be added back to taxable income for

purposes of determining modified taxable income. To

calculate this amount, first determine the amount of net

operating loss deduction allowed under section 172 that

does not exceed taxable income before taking into

account the net operating loss deduction for all applicable

tax years. Second, multiply this net operating loss

deduction by the base erosion percentage for the tax year

in which the net operating loss arose. If the net operating

loss deduction is attributable to net operating losses that

arose in more than 1 tax year, multiply the net operating

loss attributable to each tax year by the base erosion

percentage for that tax year and determine the total

amount by adding the result from each tax year. For any

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tax year beginning before 2018, the base erosion

percentage is zero.

Line 3d. Combine the amounts on lines 3a through 3c.

Part III—Regular Tax Liability

Adjusted for Purposes of Computing

Base Erosion Minimum Tax Amount

Line 4a. Enter the amount of regular tax liability (as

defined in section 26(b)) of the applicable taxpayer for the

tax year.

Consolidated groups. Affiliated groups of

corporations filing consolidated returns, please review any

additional information at IRS.gov/Form8991.

Line 4c. Subtract line 4b from line 4a. If zero or less,

enter “-0-.”

Part IV—Computation of Base

Erosion Minimum Tax Amount

Line 5b. Enter the applicable tax rate for the tax year. For

tax years beginning during 2018, the applicable rate is

5%. For tax years beginning during 2019 through 2025,

the applicable rate is 10%. For tax years beginning during

2026 or later, the applicable rate is 10.5%.

The rates above are increased by 1% if the applicable

taxpayer is a member of an affiliated group (as defined in

section 1504(a)(1)) that includes either a bank (as defined

in section 581), or a registered securities dealer (as

defined in Regulations section 1.59A-1(b)(15)).

Line 5e. Subtract line 5d from line 5c. If zero or less,

enter “-0-.” This is your base erosion minimum tax amount.

Enter this amount on your applicable tax return. For

example, for an applicable taxpayer filing Form 1120,

enter this amount on Schedule J, line 1f.

Part V—Additional Questions

Line 6. If the taxpayer is electing to use financial

statements per Regulations section 1.59A-3(b)(4)(i)(D) for

purposes of calculating interest expense allocable to a

foreign corporation’s effectively connected income, check

“Yes”; otherwise, check “No.”

Line 7. Indicate if in the current year, the taxpayer

capitalized to inventory, or included in cost of goods sold

(COGS), any cost incurred for any payment to a related

foreign party that the taxpayer treated as a deduction in

any prior tax year starting on or after January 1, 2018. If

the answer is yes, check “Yes” and complete line 8.

Line 8, column (i). Indicate the amount capitalized or

included in COGS for the current year.

Line 8, column (ii). Indicate a detailed description of the

item(s) capitalized or included in COGS such as

sales-based royalties, production-based royalties,

trademarks, trade names, section 482 adjustments,

transportation costs, etc.

Line 8, column (iii). Indicate the line item(s) where the

deduction was claimed on a prior year return, for example,

line 26, 27, or other line(s) on Form 1120-F, Form 1120,

etc.

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Line 8, column (iv). If an accounting method change

was filed on Form 3115 regarding items in column (i),

indicate the tax year in which the filing(s) was made. If no

Form 3115 was filed, indicate in an attachment the

reason(s) why. Attach additional sheets, if necessary, to

report multiple row items starting with d, e, etc.

Schedule A—Base Erosion Payments

and Base Erosion Tax Benefits

Schedule A is required to be attached if a corporation has

average annual gross receipts of $500 million or more for

the 3-tax-year period ending with the preceding tax year.

This schedule requires a taxpayer to report all amounts

that are base erosion payments as defined in Regulations

section 1.59A-3(b) and base erosion tax benefits as

defined in Regulations section 1.59A-3(c). This schedule

also requires a taxpayer to report any amounts that qualify

for certain exceptions applicable to amounts that are not

treated as base erosion payments.

For lines 2 through 11, complete columns (a-1), (a-2),

(b-1), and (b-2) for each type of payment made by the

taxpayer (or, where applicable, member of the taxpayer’s

aggregate group) to a foreign related party of the taxpayer

during the tax year. For each type of payment reported on

lines 2 through 11 of column (a-1), check all applicable

boxes in columns (c), (d), and (e) to indicate the type of

related party who received the base erosion payment from

the taxpayer.

Consolidated groups. Affiliated groups of corporations

filing consolidated returns, please review any additional

information at IRS.gov/Form8991.

Columns (a-1) and (a-2). Columns (a-1) and (a-2) are

used to determine the base erosion percentage, as

defined in Regulations section 1.59A-2(e). Enter in

columns (a-1) and (a-2) the amount of aggregate base

erosion payments and aggregate base erosion tax

benefits, respectively, that correspond to each type of

base erosion payment specified on lines 2 through 11.

The aggregate base erosion payment entered in these

lines should include only those base erosion payments

paid or accrued in the current year. The aggregate base

erosion tax benefit entered in these lines should only

include those base erosion tax benefits allowed in the

current year, which may relate to a base erosion payment

paid or accrued in the current year or a prior year. The

aggregate base erosion tax benefits in column (a-2), lines

2 through 11, should be the amounts determined before

applying the exception in Regulations section 1.59A-3(c)

(3) (base erosion tax benefits disregarded if tax withheld

on base erosion payment).

Aggregate base erosion payments include the base

erosion payments of all persons treated as one person

pursuant to the aggregation rules (see the definition of

aggregation rules, earlier). Similarly, aggregate base

erosion tax benefits include the base erosion tax benefits

of all persons treated as one person pursuant to the

aggregation rules.

However, if the taxpayer is not a member of an

aggregate group, the taxpayer will enter in columns (a-1)

and (a-2) the amount of its own base erosion payments

and base erosion tax benefits, respectively, that

Instructions for Form 8991 (Rev. 12-2025)

correspond to each type of base erosion payment

specified on lines 2 through 11, determined before

applying the exception in Regulations section 1.59A-3(c)

(3).

Columns (b-1) and (b-2). Columns (b-1) and (b-2) are

used to determine modified taxable income, as described

in Regulations section 1.59A-4, of the applicable taxpayer.

Enter in columns (b-1) and (b-2) the amount of base

erosion payments and base erosion tax benefits,

respectively, that correspond to the type of base erosion

payments specified in lines 2 through 11. Enter in these

columns the applicable taxpayer’s own base erosion

payments and base erosion tax benefits, without applying

the aggregation rules. The base erosion tax benefit in

column (b-2), lines 2 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).

Line 1. This line is reserved and should not be used at

this time.

Line 2. Enter the amount paid or accrued as cost-sharing

transaction payments to a foreign related party as defined

in Regulations section 1.482-7(b)(1)(i) for the tax year. Do

not report any negative amounts here for base erosion

payments.

Line 3, columns (a-1) and (b-1). Enter the amount paid

or accrued to a foreign related party in connection with the

acquisition or creation of intangible property rights

(patents, copyrights, trademarks, trade secrets, etc.) that

is subject to the allowance for depreciation (or

amortization in lieu of depreciation).

Line 3, columns (a-2) and (b-2). Enter the amount of

deductions allowed under chapter 1 for the tax year for

depreciation (or amortization in lieu of depreciation) with

respect to intangible property rights acquired in the

current or prior years from a foreign related party.

Line 4, columns (a-1) and (b-1). Enter the amount paid

or accrued to a foreign related party for the use or right to

use tangible or intangible property resulting in rents,

royalties, and/or license fees.

Line 4, columns (a-2) and (b-2). Enter the amount of

deductions allowed under chapter 1 for the tax year for

amounts paid or accrued to a foreign related party for the

use or right to use tangible or intangible property that

results in rents, royalties, and/or license fees.

Line 5a, columns (a-1) and (b-1). Enter the amount

paid or accrued to a foreign related party as

compensation or consideration for services, but excluding

any amount that falls within the exception in Regulations

section 1.59A-3(b)(3)(i). Enter amounts paid or accrued in

excess of the total services cost of the services eligible for

the services cost method exception (or the mark-up

component). Also, enter amounts paid or accrued for

services ineligible for the services cost method exception.

Line 5a, columns (a-2) and (b-2). Enter the amount of

deductions allowed under chapter 1 for the tax year for

amounts paid or accrued to a foreign related party as

compensation or consideration for services, but excluding

any deduction for amounts paid or accrued that fall within

Instructions for Form 8991 (Rev. 12-2025)

the exception in Regulations section 1.59A-3(b)(3)(i).

Enter amounts of deductions allowed under chapter 1 for

the tax year for amounts paid or accrued in excess of the

total services cost of the services eligible for the services

cost method exception (or the mark-up component). Also,

enter amounts of deductions for services ineligible for the

services cost method exception.

Line 5b. Enter the amount paid or accrued to a foreign

related party as compensation or consideration for

services that are defined under the exception in

Regulations section 1.59A-3(b)(3)(i). Determine the

amount of compensation or consideration eligible for this

exception after applying the aggregation rules.

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 which a deduction is allowable in the tax year.

Line 6, columns (a-2) and (b-2). Enter the amount of

deductible interest expense allowed under chapter 1 for

the tax year with respect to amounts paid or accrued to a

foreign related party. For purposes of completing line 6,

columns (a-2) and (b-2), any reduction in the amount of

interest for which a deduction is allowed for the tax year

under section 163(j) is treated as allocable first to interest

paid or accrued to persons who are not related parties

with respect to the taxpayer and then to such related

parties.

Line 7, columns (a-1) and (b-1). Enter the amount paid

or accrued to a foreign related party for the purchase of

tangible personal property.

Line 7, columns (a-2) and (b-2). Enter the amount of

deductions allowed under chapter 1 for the tax year for

amounts paid or accrued to a foreign related party for the

purchase of tangible personal property.

Line 8, columns (a-1) and (b-1). Enter the amount of

any premiums or other consideration paid or accrued to a

foreign related party for insurance and reinsurance that

are taken into account under section 803(a)(1)(B) (relating

to return premiums and premiums or other consideration

arising out of indemnity reinsurance that reduces life

insurance gross income) or section 832(b)(4)(A) (relating

to amounts deducted from gross premiums written on

insurance contracts for return premiums and premiums

paid for reinsurance). See Regulations section 1.59A-3(b)

(1)(iii).

Line 8, columns (a-2) and (b-2). Enter the amount of

any reduction under section 803(a)(1)(B) in gross

premiums and other consideration on insurance and

annuity contracts for premiums and other consideration

arising out of indemnity insurance paid to a foreign related

party, and the amount of any deduction under section

832(b)(4)(A) from the amount of gross premiums written

on insurance contracts during the tax year for premiums

paid to a foreign related party for reinsurance.

Line 9a, columns (a-1) and (b-1). Enter the amount

paid or accrued to a foreign related party with respect to

any derivative contract that is not a qualified derivative

payment as defined in Regulations section 1.59A-6. Do

not include any amount paid that is a qualified derivative

payment.

7

Line 9a, columns (a-2) and (b-2). Enter the amount of

deductions allowed under chapter 1 for the tax year for

amounts paid or accrued to a foreign related party with

respect to any payment that is not a qualified derivative

payment. Do not include any deductions allowed under

chapter 1 for the tax year if the deductible amount is a

qualified derivative payment.

Line 9b. Enter the amount paid to a foreign related party

that is a qualified derivative payment excepted by

Regulations section 1.59A-6(b). Determine the amount of

the qualified derivative payments after applying the

aggregation rules. Generally, a qualified derivative

payment is any payment made by the taxpayer pursuant to

a derivative contract provided that the taxpayer recognizes

gain or loss on the derivative contract as if it were sold for

its fair market value on the last business day of the tax

year; treats the gain or loss as ordinary; and treats the

character of all other items of income, deduction, gain, or

loss with respect to a payment pursuant to the derivative

as ordinary. A payment is not a qualified derivative

payment if the payment would be treated as a base

erosion payment if it were not made pursuant to a

derivative (such as interest, royalty, or services income).

With respect to a contract with both derivative and

non-derivative components, a payment is not a qualified

derivative payment if it is properly allocable to the

non-derivative component.

A taxpayer meets the reporting requirement of

Regulations sections 1.59A-6(b)(2) and 1.6038A-2(b)(7)

(ix) by entering the amount on line 9b. For tax years

beginning on or after 2027, pursuant to Regulations

section 1.6038A-2(b)(7)(ix), a taxpayer will also need to

provide a representation that all payments reported on

line 9b satisfy the reporting requirements of Regulations

section 1.59A-6(b)(2).

Line 10, columns (a-1) and (b-1). Enter the amount

paid or accrued to certain expatriated entities that results

in a reduction of the gross receipts of the taxpayer. This

amount includes payments to a surrogate foreign

corporation that is a related party, but only if the entity first

became a surrogate foreign corporation after November 9,

2017. The amount also includes payments to a foreign

person that is a member of the same expanded affiliated

group, as defined in section 7874(c)(1), as the surrogate

foreign corporation. A surrogate foreign corporation is

defined in section 7874(a)(2)(B), but it does not include a

foreign corporation that is treated as a domestic

corporation under section 7874(b).

Line 10, columns (a-2) and (b-2). Enter the amount of

the reduction to gross receipts with respect to payments to

expatriated entities that were used to compute gross

income for the tax year.

related party. Only include those amounts that have not

otherwise been included in Schedule A on lines 2 through

10.

Attach a statement for line 11. For amounts reported

on line 11, attach a statement describing the type and

amount of other payments, using the same column

headings as specified in Schedule A: “Aggregate Group’s

Base Erosion Payments,” “Aggregate Group’s Base

Erosion Tax Benefits,” “Taxpayer’s Base Erosion

Payments,” and “Taxpayer’s Base Erosion Tax Benefits.”

For each type of payment, the attachment must identify

the relationship of the recipients consistent with the

categories and instructions for columns (c), (d), and (e) of

Schedule A.

Line 12. For columns (a-1), (a-2), (b-1), and (b-2), add

lines 2 through 11 and enter the total amount.

Line 13. Enter the aggregate amount of base erosion tax

benefits from columns (a-2) and (b-2) of lines 2 through 11

on which either (1) tax is imposed under section 871(a) or

section 881, and with respect to which tax has been

deducted and 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 is reported and paid

under Regulations section 1.884-4(a)(2)(iv).

Line 14. Complete the Worksheet for Schedule A,

Line 14, to determine the portion of the base erosion tax

benefits from lines 2 through 11 on which, pursuant to a

U.S. income tax treaty, tax is either (1) imposed under

section 871 or section 881 at a reduced withholding rate,

or (2) imposed under section 884(f) and paid and reported

at a reduced rate. The amount to be entered on line 14 is

the same proportion of such base erosion tax benefits as

the reduced rate of tax specified by the relevant treaty

bears to the rate of tax imposed without regard to the

treaty. Complete a separate worksheet for column (a-2)

amounts and column (b-2) amounts on line 14, as

necessary. Keep a copy of the completed worksheet for

your records.

Line 15. Subtract the sum of line 13 and line 14 from

line 12, and enter the amount on line 15. Line 15, column

(a-2), is the total amount of aggregate base erosion tax

benefits for the tax year that is used for purposes of

determining the taxpayer’s base erosion percentage.

Line 15, column (b-2), is the total amount of base erosion

tax benefits for the tax year that is used for purposes of

determining the taxpayer’s modified taxable income.

Line 15, column (b-2), is also the total amount of base

erosion tax benefits for the tax year that is used for

purposes of determining the taxpayer’s base erosion

percentage when the taxpayer is not a member of an

aggregate group.

Line 11, columns (a-1) and (b-1). Enter the total

amount of any other base erosion payments that were

paid or accrued to a foreign related party and for which a

deduction is allowable under chapter 1. Only include

those amounts that have not otherwise been included in

Schedule A on lines 2 through 10.

Line 11, columns (a-2) and (b-2). Enter the amount of

deductions allowed under chapter 1 for the tax year for

other base erosion payments paid or accrued to a foreign

8

Instructions for Form 8991 (Rev. 12-2025)

Instructions for Worksheet for Schedule A,

Line 14

separate attachment for each member of the aggregate

group that is waiving deductions that contains the name

and EIN of the aggregate group member and the

information shown in columns (a) through (i). Attach each

attachment to Schedule B. Include the total amount of the

deductions being claimed by all of your aggregate group

members with respect to the items or property that their

respective waiver elections relate to on line 14, column

(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, later.

Use a separate row for each type of base erosion payment

and each treaty-reduced withholding tax rate to which the

corresponding base erosion tax benefit is subject.

Do not include a base erosion tax benefit that is subject

to the 30% statutory withholding tax rate or a base erosion

tax benefit that is exempt from tax pursuant to relevant

income tax treaty provisions.

Do not combine the base erosion tax benefits that are

subject to different withholding rates. Do not enter any

blended withholding tax rates.

Column (a). Enter a brief description of the item or

property to which the deduction relates to; for example,

debt instrument, intangible property (such as patent,

trademark, or license), personal property, real property,

etc.

Column A. Enter the type of base erosion payment that

corresponds to the type of base erosion payment in

Schedule A.

Column (b). Enter the date on which, or the time period

for which, the waived deduction was paid or accrued.

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 respect to which tax is deducted

and withheld at a reduced withholding rate pursuant to a

U.S. income tax treaty.

Column (c). Enter the provision of the Code (and

regulations, as applicable) that allows the deduction for

the item or property to which the election relates.

Column (d). Enter the schedule and line number of the

controlled group’s federal income tax return where the

deduction is reflected (or would have been reflected).

Column C. Enter the treaty-reduced withholding tax rate

to which the base erosion tax benefit is subject.

Column D. Divide the tax rate in column C by 30% (0.30).

Round to four decimal places.

Column (e). Enter the name of the foreign related party

that is or will be the recipient of the payment that

generates the deduction.

Column E. Multiply the amount in column B by column D.

The amount is the portion of base erosion tax benefits with

respect to the specific type of base erosion payment and

the specific treaty-reduced rate of withholding that is not

taken into account in computing modified taxable income.

Add the amounts in column E and enter the total on

Schedule A, line 14, column (a-2) or (b-2).

Column (f). Enter the tax identification number of the

foreign related party payee that was entered in column (e).

This can be an EIN, individual taxpayer identification

number (ITIN), or foreign tax identification number (FTIN).

Column (g). Enter the country of organization of the

foreign related party that was entered in column (e).

Schedule B—Waiver of Deductions

Column (h). For each item or property reported under

columns (a) through (g), enter the amount of the

deduction claimed on the tax return (after the waiver

indicated in column (i)).

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 or property of which a deduction

related to such item or property is being waived.

Column (i). For each item or property reported under

columns (a) through (g), enter the amount of the

deduction being waived.

Caution: You should use lines 1 through 13 to report only

your own deductions that you are electing to waive. If a

member or members of your aggregate group has also

elected to waive any of its deductions, complete a

Line 14. If additional space is necessary, complete and

attach a separate worksheet with the same information as

Worksheet for Schedule A, Line 14

A

B

C

D

E

Type of base erosion

payment

Amount of base erosion tax

benefit

Treaty-reduced withholding

rate

Divide column C by 30%

(0.30) (round to four

decimal places)

Multiply column B by

column D

%

%

%

%

%

Add the amounts in column E and enter the total on the appropriate line on Schedule A, line 14.

Instructions for Form 8991 (Rev. 12-2025)

9

shown under columns (a) through (i) for each additional

item or property. Enter the total of deductions claimed for

the tax year on line 14, column (h), and the total of

deductions waived on line 14, column (i).

Also, include on this line the total of deductions being

claimed (column (h)) and waived (column (i)) from other

taxpayers that are members of your aggregate group, if

applicable.

aggregated on Form 3800, you should have a separate

record of each credit.

Line 5. Section 59A(b)(1)(B)(ii)(II) limits the allowable

adjustment for applicable section 38 credits to 80% of the

lesser of applicable section 38 credits or the BEMTA

computed without the adjustment for applicable section 38

credits computed in Part III.

Schedule C—Credits Reducing

Regular Tax Liability in Computing

Base Erosion Minimum Tax Amount

(BEMTA)

Part II—Applicable Section 38 Credits

Part I—Credits Allowed Against Regular Tax

Line 9. Enter the total amount of section 45 credit shown

on Form 3800, Part III, line 1f, column (g); Part III, line 4e,

column (g); Part IV, line 1f, column (g); and Part IV, line 4e,

column (g). This total equals the available credit for

renewable electricity production in the tax year.

Line 1. You must enter the total credits allowed against

your regular tax liability in the tax year, except for credits

allowed under sections 33, 37, and 53. Total credits

include the sum of all credits shown on Form 1120 or

other applicable return.

Line 2. Enter the total amount of credit for increasing

research activities reported on Form 3800, Part III, line 1c,

column (g), plus Part IV, line 1c, column (g). This total

equals the available credit for increasing research

activities in the tax year.

Line 3. Enter only that portion of the available credit for

increasing research activities that was included on Form

3800, Part II, Section D, line 38, and used against regular

tax liability. You must apply the general rules and the

ordering rules for use of general business credits from the

Instructions for Form 3800. The Instructions for Form 3800

provide that credits reported on Form 3800 are treated as

used on a first-in, first-out basis by offsetting the earliest

earned credits first. Therefore, the order in which the

credits are used in any tax year is:

• Carryforwards to that year, the earliest ones first;

• The general business credit earned in that year; and

• The carryback to that year.

If your general business credits exceed your tax liability

limit, the credits are used in the order as they are listed in

section 38(b). Although general business credits are

Line 8. Enter the total amount of low-income housing

credit shown on Form 3800, Part III, line 4d, column (g);

and Part IV, line 2b, column (g), and line 4d, column (g).

This total equals the available credit for low-income

housing in the tax year.

Line 10. Enter only the total amount of investment credit

allocable to the section 48 energy credit shown on Form

3800, Part III, line 4a, column (g); and Part IV, line 4a,

column (g). This total equals the available investment

credit properly allocable to the energy credit in the tax

year.

Line 11. Enter only that portion of the available applicable

credits that was included on Form 3800, Part II, Section D,

line 38, and used against regular tax liability. This

represents the amount of applicable credits allowed

against regular tax liability in the current year. Refer to the

ordering rules described in the earlier instructions for

Schedule C, line 3.

Part III—BEMTA Determined Without Adjustment

for Applicable Section 38 Credits

Line 15. Subtract line 14 from line 13. If zero or less,

enter “-0-.”

Line 16. You must compute the BEMTA without

adjustment for applicable section 38 credits to allow

computation of the limitation of applicable section 38

credits on lines 4 and 5 of Part I.

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the

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and to allow us to figure and collect the right amount of tax.

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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.

10

Instructions for Form 8991 (Rev. 12-2025)