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Base Erosion and Anti-Abuse Tax (BEAT)

A U.S. tax intended to prevent large multinational companies from reducing their U.S. tax bill by making deductible payments (like royalties or service fees) to their foreign affiliates.

Extraterritorial Tax

A tax imposed by a foreign country on a corporation, calculated based on the income or profits of other related parties (not necessarily direct subsidiaries) that are connected to that corporation through ownership.

Foreign-Owned Extraterritorial Tax Regime Entity

A U.S. taxpayer that is controlled by a foreign company (which itself is not controlled by a U.S. company), where that foreign company or its related foreign entities are subject to an 'extraterritorial tax' in their home country.

Internal Revenue Code of 1986

The official compilation of all federal tax laws of the United States.

Cost of Goods Sold (COGS)

The direct costs attributable to the production of goods sold by a company, including material costs and direct labor costs.

Base Erosion Tax Benefit

Within the BEAT framework, this refers to certain deductible payments made by a U.S. company to a foreign related party that are considered to reduce the U.S. tax base.