Strategies for the New Base Erosion and Anti-Abuse Tax

Document Type


Publication Date


Journal / Book Title

Journal of Taxation of Investments


The Tax Cuts and Jobs Act of 2017 imposes a new tax regime known as the "base erosion and anti-abuse tax." This article discusses the reasons for this new tax and the details involved in determining the amount of tax due. The authors point out that there are many loopholes in international tax law--including the differences in different jurisdictions' tax rates, the "worldwide tax system" versus the "territorial tax system," and the use of a controlled foreign corporation as a tax shelter--and that many U.S. multinational corporations have taken advantage of them. The authors cite five relevant cases--Burger King, Medtronic, Apple, Horizon, and SAP--and investigate the components of this new tax involving the concept of "base erosion payment." They then suggest ways corporations might respond to the new tax.

Journal ISSN / Book ISBN

0747-9115 (paper), 1933-933X (online)

Published Citation

Yang, J. G. S., Poon, W. W., & Chiaho Chang. (2018). Strategies for the New Base Erosion and Anti-Abuse Tax. Journal of Taxation of Investments, 36(1), 67–77.