Form 8991: The Base Erosion Tax for Large Corporations
Published November 8, 2026
Form 8991 is used to figure the base erosion minimum tax. Large corporate taxpayers use it when they make deductible payments to foreign related parties. The tax is often called BEAT, which stands for base erosion and anti-abuse tax.
This post is general information from the IRS form and its instructions. It does not say whether a taxpayer must file, and it does not give tax advice for a particular company.
The gross receipts test
Part I starts with an applicable taxpayer test. The taxpayer lists gross receipts for the three preceding tax years. Line 1f is the three-year average of annual gross receipts. Line 1g asks whether that average is $500 million or more.
If the answer on line 1g is No, the form says to stop there and attach the form to the tax return. The taxpayer does not go on to the tax computation in that case.
A taxpayer that belongs to an aggregate group uses the figures for the whole group. The form then asks for a statement that lists the names and EINs of the separate taxpayers counted as one person.
Base erosion payments
Line 2a comes from Schedule A. Schedule A lists base erosion payments and base erosion tax benefits. These are amounts paid or accrued to foreign related parties, and the tax benefit from deducting them. The instructions explain which payments count and which are excepted.
Lines 2b through 2h take other deductions and exceptions into account. Each line has its own instructions, so read them in order.
The base erosion percentage
The base erosion test compares base erosion tax benefits with the higher of total deductions. The instructions describe a threshold of 3%. If the aggregate group includes a bank or a registered securities dealer, the threshold is 2%. A taxpayer that meets the threshold must then compute the tax.
The tax itself
The tax is measured against modified taxable income. The rate is 10%. The instructions say the rate rises to 10.5% for tax years beginning after 2025. The tax is the amount by which the rate times modified taxable income exceeds regular tax liability, after the adjustments the statute requires. It never falls below zero.
The form and the instructions show each step of the modified taxable income computation.
Reading the form in order
The form is built in parts, and each part depends on the one before it. Part I decides whether the rest of the form applies at all. If line 1g is No, the later parts are not reached. If line 1g is Yes, the taxpayer works through the base erosion lines in order and then computes the tax. Working out of order often means starting again.
Records to keep
Keep the gross receipts for each of the three preceding years, the payment records that support Schedule A, and the group statement when one applies. These records support each figure on the form if questions come up later.
Mistakes to avoid
- Stopping at line 1g without attaching the form when the answer is No.
- Using only one year of receipts instead of the three preceding years.
- Leaving out the aggregate group statement when the box on the first page is checked.
- Using the 10% rate for a tax year that begins after 2025. The instructions give the higher rate for those years.
Other forms tied to foreign ownership and foreign corporations include Form 5472: Reporting a 25% Foreign-Owned U.S. Corporation and Form 1120-F: U.S. Income Tax Return of a Foreign Corporation. The deduction for certain foreign income is covered in Form 8993: Section 250 Deduction for FDII and GILTI.
Because the rules change from year to year, check the current instructions before you complete any line. Keep the Schedule A workpapers with the return.
Sources: Sources: IRS, Form 8991, Tax on Base Erosion Payments of Taxpayers With Substantial Gross Receipts (Rev. December 2024) (https://www.irs.gov/pub/irs-pdf/f8991.pdf); Instructions for Form 8991 (Rev. December 2025) (https://www.irs.gov/pub/irs-pdf/i8991.pdf) This is general information, not advice about your specific return.
