United States: Treasury And IRS Propose Welcome (And Some Unwelcome) Guidance On The Base Erosion And Anti-Abuse Tax

Treasury and the IRS have issued proposed regulations filling a number of gaps and providing necessary guidance on the Base Erosion and Anti-Abuse Tax (BEAT). In general, the guidance is reasonably consistent with the statute and legislative history, although there are some elements that cannot be readily inferred from these sources. Among other things, the proposed regulations elucidate certain specific issues regarding base erosion payments, including the services cost method, treatment of cost of goods sold under Section 471 or Section 263A, and netting of payments.

Determining the Aggregate Group

Proposed § 1.59A-2 provides rules for determining if a taxpayer is an applicable taxpayer (the BEAT applies only to a taxpayer that is an applicable taxpayer). Generally, an applicable taxpayer is a corporation that satisfies the gross receipts test and the base erosion percentage test, as described below.

Section 59A and proposed § 1.59A-1 and -2 provide that the taxpayer and certain other corporations that are related to the taxpayer are treated as one person for purposes of determining whether a taxpayer satisfies these tests. Specifically, Section 59A(e)(3) aggregates corporations ("aggregate group") on the basis of persons treated as a single employer under § 52(a), which treats members of the same controlled group of corporations (as defined in § 1563(a) with certain modifications) as one person. Foreign corporations are generally excluded, except to the extent that the foreign corporation has effectively connected income subject to tax under § 882.

The proposed regulations generally provide that payments between members of the aggregate group are not included in the gross receipts of the aggregate group, consistent with the single entity concept in § 59A(e)(3). Similarly, the proposed regulations generally provide that payments between members of the aggregate group are also not considered for purposes of the numerator or the denominator in the base erosion percentage calculation. Proposed § 1.59A-2(e).

Payments between the aggregate group and any foreign corporation that is not within the aggregate group are considered in applying both the gross receipts test and the base erosion percentage tests. However, payments to a foreign corporation from within the aggregate group that are subject to net income tax in the United States are eliminated and not considered in applying the gross receipts test and the base erosion percentage test. Proposed § 1.59A-2(d).

Gross Receipts Test

Proposed § 1.59A-2(d) provides that a taxpayer satisfies the gross receipts test if the taxpayer, or the aggregate group of which the taxpayer is a member, has $500 million or more of average annual gross receipts during the three prior taxable years. In the case of a foreign corporation, gross receipts include net income that is ECI or income taken into account in determining net taxable income under an applicable U.S. income tax treaty.

The proposed regulations measure gross receipts of a taxpayer by reference to the taxpayer's aggregate group determined as of the end of the taxable year for which BEAT liability is being computed, including gross receipts of those aggregate group members during the three-year period preceding that taxable year.

Base Erosion Percentage Test

The base erosion percentage test is generally satisfied if the taxpayer (or the taxpayer's aggregate group) has a base erosion percentage of three percent or more.

The proposed regulations provide that the base erosion percentage for a taxable year is computed by dividing (1) the aggregate amount of base erosion tax benefits (the numerator), by (2) the sum of the aggregate amount of deductions plus certain other base erosion tax benefits (the denominator). In the case of a taxpayer that is a member of an aggregate group, the base erosion percentage is measured by reference to the deductions or certain reductions in gross income of the taxpayer and members of the taxpayer's aggregate group as of the end of the taxpayer's taxable year.

Base erosion tax benefits are generally the deductions or reductions in gross income that result from base erosion payments, but excluding deduction allowed under §§ 172, 245A, or 250, amounts paid or accrued to foreign related parties for SCM services, and certain other payments. Generally, these deductions are also excluded from the denominator of the base erosion percentage. The proposed regulations also exclude any § 988 losses from the numerator and the denominator in determining the base erosion percentage.

The numerator of the base erosion percentage only takes into account base erosion tax benefits, which generally are base erosion payments for which a deduction is allowed under the Code for a taxable year. Similarly, the proposed regulations ensure that the denominator of the base erosion percentage only takes into account deductions allowed under the Code by providing that the denominator of the base erosion percentage does not include deductions that are not allowed in determining taxable income for the taxable year.

A base erosion tax benefit is not included in the numerator when the payment was subject to tax under §§ 871 or 881 and that tax has been deducted and withheld under §§ 1441 or 1442. In addition, the proposed regulations provide that for any base erosion payment subject to a reduced rate of withholding tax under an income tax treaty, the associated amount of base erosion tax benefits eliminated from the numerator of the base erosion percentage calculation is determined using rules similar to those in § 163(j)(5)(B) as in effect before the Act.

The base erosion percentage also includes certain premium or other consideration paid to a foreign related party for reinsurance, and amounts paid or accrued by the taxpayer to certain surrogate foreign corporations that result in a reduction in gross receipts to the taxpayer. Section 59A(c)(4)(A)(ii)(II) provides that those base erosion tax benefits that result from reductions in gross income are included in both the numerator and the denominator in the same amount. Other payments that reduce gross income but that are not base erosion payments are not included in the denominator of the base erosion percentage.

Special rules apply for determining the amount of base erosion tax benefits in the case of transactions that are marked to market and for taxpayers in aggregate groups with different taxable year ends.

Base erosion payments

Central to the application of BEAT is the "base erosion payment." For most taxpayers, base erosion payments will consist of (a) amounts paid or accrued to a foreign related party for which a deduction is allowed under the Code and (b) amounts paid or accrued to a foreign related party in connection with the acquisition of depreciable or amortizable property. Certain payments by inverted companies and certain reinsurance payments will also be base erosion payments.

The proposed regulations illuminate certain specific issues regarding base erosion payments as follows:

Services Cost Method. In welcome guidance, the Proposed Regulations interpret the statutory exception for payments eligible for the services cost method under Section 1.482-9 (the SCM Exception) to include the cost component of payments paid with a markup. Commentators had debated whether the SCM Exception was available for payments that were eligible for SCM, but nonetheless were compensated with a markup under the taxpayer's transfer pricing. The Proposed Regulations resolve this question favorably by applying the SCM Exception to the extent of total services cost of the payment (excluding the markup). In applying the SCM Exception, taxpayers must maintain adequate books and records to substantiate the cost of the service. Under the SCM Exception, taxpayers should examine service fees charged at cost-plus to determine which ones satisfy the requirements for the SCM Exception.

Treatment of COGS. Other than in the limited case of surrogate foreign corporations subject to Section 59A(d)(4), the Proposed Regulations do not specifically address expenses paid to a foreign related party that are treated as cost of goods sold under Section 471 or Section 263A. Nonetheless, the Preamble recognizes, consistent with longstanding case law, that costs includible in inventory result in reductions of gross income under Section 61, rather than deductions. See, e.g., Alternative Health Care Advocates et al. v. Commissioner, 151 TC No. 13 (Dec. 21, 2018) (holding that COGS is not subject to disallowance under Section 280E). No BEAT-specific guidance, however, is provided to determining what expenses are included in inventory. For businesses that maintain inventory, proper application of BEAT will depend on review and application of the existing inventory tax accounting rules.

Netting of Payments. Many taxpayers asked for guidance on netting of intercompany payments to and from affiliates. The Proposed Regulations provide that the amount of any base erosion payment is generally determined on a gross, not a net basis, regardless of any contractual right of offset or netting. A limited exception is provided for certain mark-to-market transactions.

Agency and Reimbursement Arrangements. Another area where taxpayers sought guidance was those involving the reimbursement doctrine, agency, beneficial ownership, and assignment of income. No BEAT-specific guidance is provided on these questions. Rather the Preamble directs taxpayers to apply existing common law doctrines to characterize such transactions for purposes of BEAT.


Fenwick Observation. In many cases, the proper application of BEAT will depend on the proper application of common law doctrines and federal income tax accounting principles as to which taxpayers may have previously given little thought. Prior to BEAT, taxpayers may rarely have considered which of their affiliates is primarily responsible for an expense, or whether a global services arrangement is characterized for tax purposes as a principal with a set of subcontractors, or series of joint principals directly earning customer revenue, or as a conduit arrangement. Taxpayers may find it fruitful to explore common law doctrines in characterizing intercompany arrangements for BEAT purposes.


Non-Cash Payments. The Proposed Regulations provide that "payments" to a foreign related party for BEAT purposes include amounts paid in kind, including in the form of cash, stock or assumption of liabilities. Although the Proposed Regulations themselves do not further flesh out this rule, the Preamble states that the definition of payments includes an exchange of property for stock in non-recognition transactions such as subsidiary liquidations, reorganizations and Section 351 transactions. In addition, the Preamble also states that the carryover basis in such a non-recognition transaction involving a "payment" in kind will be subject to BEAT. The Preamble also states that a base erosion payment includes a loss recognized on the transfer of property to a foreign related party—presumably, a "payment" in the form of property for the foreign related party's cash. However, the Preamble expresses that a Section 301 distribution of property is not considered a "payment."


Fenwick Observation. This interpretation of "payment" does not square with common understandings of that word, and would seem to cause BEAT to apply to all transactions that bring depreciable or intangible assets into the U.S. without a step-up in basis. Additionally, the definition of payment would greatly complicate international M&A transactions and post-acquisition restructuring. For example, if a U.S. company purchased a foreign target, made a Section 338(g) election, and then "checked the box" to liquidate the target, the newly created basis from the Section 338(g) election would give rise to a base erosion payment. Applicable taxpayers who are subject to BEAT will need to develop a new playbook for foreign acquisitions where some or all of the acquired IP is going to be brought into the U.S.


Effectively Connected Payments. The Proposed Regulations exclude from the definition of a base erosion payment payments made to a foreign payee that includes the payments in effectively connected income (ECI). This exception for ECI only applies where the payee provides a W-8ECI certificate to certify an exception from U.S. withholding tax. Although not entirely clear, the ECI exception apparently does not apply to a non-withholdable payment, such as for the purchase of depreciable or amortizable property, that is ECI to the payee. The ECI exception also does not apply if the payee is exempt from U.S. tax on the payment under an applicable income tax treaty.

Pre-2018 Payments.By the Act, BEAT is made applicable to payments paid or accrued in taxable years beginning after December 31, 2017. The Proposed Regulations confirm that deductions taken into account after 2018 attributable to payments made before 2018 are not subject to BEAT. For example, if a U.S. corporation purchased depreciable property from a foreign affiliate in 2015, depreciation deductions with respect to that purchase in 2018 and later years are not base erosion tax benefits. See the discussion below for an exception that applies in the case of disallowed business interest expense under Section 163(j).

Base Erosion Tax Benefits

Once base erosion payments are identified, the amount of "base erosion tax benefits" can be determined. This amount is important for two reasons. First, the amount of base erosion tax benefits factors directly into the computation of the base erosion percentage. As discussed above, a taxpayer is only subject to BEAT if its base erosion percentage for the year is at least 3 percent. Second, for a taxpayer subject to BEAT, base erosion tax benefits are added back to taxable income to arrive at "modified taxable income," the income base to which the BEAT tax applies, as discussed below.

Section 59A(c)(2), which the proposed regulations mirror, defines the term "base erosion tax benefit" to include the following four items:

  • Any deduction allowable with respect to any base erosion payment
  • Any deduction allowed for depreciation (or amortization in lieu of depreciation) with respect to property acquired with a base erosion payment
  • In the case of reinsurance premiums or other payments, certain deductions and other reductions in the gross amount subject to tax and
  • In the case of certain inverted entities, any reduction in gross receipts with respect to an amount paid or accrued to the surrogate foreign corporation or any foreign person that is a member of the same expanded affiliated group

Consistent with the statute, the proposed regulations also provide that a base erosion tax benefit is not taken into account if tax is imposed on the base erosion payment under § 871 or 881, and the tax has been deducted and withheld under § 1441 or 1442. If a treaty reduces the rate of tax under § 871 or 881, the amount of the base erosion tax benefit that is not taken into account is correspondingly reduced (i.e., the amount of the base erosion tax benefit increases).

The proposed regulations provide several examples of the interaction between base erosion tax benefits for interest expense and § 163(j). These examples follow the statutory rule that a disallowed interest expense that carries forward under § 163(j) is first treated as an unrelated party interest expense, and then as a related party interest expense. Correspondingly, an allowed interest expense is first treated as a related party interest expense, and then as an unrelated party interest expense.

Base Erosion Minimum Tax Amount

The additional tax imposed by the BEAT is the "base erosion minimum tax amount" or BEMTA. The BEMTA equals the excess of (1) the applicable BEAT rate (5 percent in 2018, 10 percent for 2019-2025 and 12.5 percent after 2025) multiplied by modified tax income (MTI) over (2) the adjusted regular tax liability.

In determining the adjusted regular tax liability, most credits (including the foreign tax credit) are subtracted from the regular tax liability amount, which has the effect of increasing the BEMTA by disallowing credits, including the foreign tax credit.

Credits for the overpayment of taxes and for taxes withheld at source are not subtracted from the regular tax liability because these credits relate to federal income tax paid for the current or previous year and therefore should not increase the BEMTA.

For taxable years beginning before January 1, 2026, the adjusted regular tax liability is not reduced by the research credit determined under § 41(a) or by a portion of applicable § 38 credits. Before 2026, these special credits do not reduce the adjusted regular tax liability and thus do not increase the BEMTA. However, since foreign tax credits are taken into account before the special credits, the benefit can be limited for taxpayers with excess foreign tax credits.

Modified Taxable Income

Section 59A(c) provides that MTI is taxable income determined without regard to base erosion tax benefits and the base erosion percentage of any NOL deduction. The proposed regulations adopt an "add-back" approach to implement this rule. Base erosion tax benefits and base erosion percentage NOL deduction amounts are added back to taxable income, which increases the BEMTA. The MTI computation is made on a taxpayer-by-taxpayer basis. The aggregate group concept is not relevant here: Only the relevant taxpayer's base erosion tax benefits and base erosion percentage of NOLs are added back.

If current-year deductions create negative taxable income, then the negative amount is the starting point for computing MTI. When a usable NOL carryover exceeds the positive taxable income, the excess amount of NOL does not reduce taxable income below zero for determining the starting point for computing MTI.

For example, assume $100 of income, current deductions of $150 ($70 of which is a base erosion tax benefit) and a pre-2018 NOL carryforward of $400. The starting point for computing MTI does not take into account the $400 NOL carryforward because the $150 of deductions exceeds the $100 of income. In this example, the MTI is $20 ($100 taxable income less deductions of $150 (negative $50), and add back of the $70 base erosion tax benefit).

If we instead assume the income is $500, the starting point for computing MTI is $0 ($500 of income less $150 deductions less $350 of the $400 NOL deduction). The MTI is $70, ($0 taxable income and add back of $70 base erosion tax benefit).


Fenwick Observation. The Proposed Regulations reject the "recomputation" approach to NOL carryovers that would be preferable to many taxpayers. As a result of treating the starting point of MTI as zero, taxpayers with NOLs may have a BEAT liability well before they would have regular tax liability without regard to any base erosion payments.


The base erosion percentage of NOL is determined in the year the NOL arose, or vintage year, since the vintage year reflects the portion of base eroding payments that are reflected in the NOL carryover. The proposed regulation adopted the vintage year approach over the approach of looking at the year that the NOL arose. The proposed regulations state that the vintage-year approach is preferred because it is a fixed percentage, creating greater certainty as to the amount of the future add-back to MTI. Based on the vintage approach, NOLs that arose in taxable years beginning before 2018 and that are deducted as carryovers, the base erosion percentage is zero and there is no add-back to MTI for the use of those NOL carryovers.

Partnerships

The proposed regulations generally apply an aggregate approach in conjunction with the gross receipts test for evaluating whether a corporation is an applicable taxpayer and in addressing the treatment of payments made by a partnership or received by a partnership for purposes of section 59A.

For example, in determining gross receipts, if a member of an aggregate group owns an interest in a partnership, the group includes its "share" of the gross receipts of the partnership in its gross receipts computation. The aggregate group's share is proportionate to its distributive share of items of gross income from the partnership.

Further, when determining whether a corporate partner that is an applicable taxpayer has made a base erosion payment, amounts paid or accrued by a partnership are treated as paid by each partner to the extent an item of expense is allocated to the partner under section 704. Thus, for example, a partnership in which an applicable taxpayer is a partner is treated as making a payment to a foreign related party when the partnership makes a payment to the foreign related party.

Similarly, any amounts received by or accrued to a partnership are treated as received by each partner to the extent the item of income or gain is allocated to each partner under section 704. Thus, for example, a taxpayer which pays a domestic partnership that is owned by related foreign partners is treated as paying those foreign related partners directly.

The rules and exceptions for base erosion payments and base erosion tax benefits apply accordingly on an aggregate basis.

The Preamble provides that the proposed regulations do not provide for special treatment of base erosion tax benefits attributable to a partnership or to partnership nonrecognition transactions. Instead, the aggregate principle generally applies to these situations. For example, if a partnership acquires property from a foreign related party of a taxpayer that is a partner in the partnership, deductions for depreciation of the property allocated to the taxpayer generally are base erosion tax benefits. Similarly, if a foreign related party and a taxpayer form a partnership, and the foreign related party contributes depreciable property, deductions for depreciation of the property generally are base erosion tax benefits, in part, because the partnership is treated as acquiring the property in exchange for an interest in the partnership under section 721.

Taxpayers owning a partnership interest with a value of less than $25 million and who have less than a 10 percent interest in the capital and profits of such partnership are excluded from the aggregate approach described above.

Consolidated Group Rules

The proposed regulations provide that for affiliated corporations electing to file a consolidated income tax return, the BEAT tax is determined at the consolidated group level, rather than determined separately for each member of the group.

Items from intercompany transactions are not taken into account for purposes of making the computations under the BEAT rules. For example, any increase in depreciation deductions resulting from intercompany sales of property are disregarded for purposes of determining the taxpayer's base erosion percentage. Similarly, interest payments on intercompany obligations (as defined in §1.1502-13(g)(2)(ii)) are not taken into account in making the computations under section 59A.

Regarding the coordination of section 163(j) and the BEAT rules, the proposed regulations generally implement the classification approach of proposed §1.59A-3(c)(4) on a consolidated basis to identify which interest deductions are allocable to domestic related party payments, foreign related party payments, and unrelated party payments. Slightly different rules apply to the deduction of current year business interest expense than to the deduction of section 163(j) carryforwards.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
2 Dec 2019, Speaking Engagement, San Francisco, United States

With the revenue and lease standards in the rear-view mirror but CECL still to be adopted, it is as important as ever to keep up with new and evolving accounting standards and regulations especially given the SEC’s Disclosure Modernization and Simplification initiatives.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions