Advanced Strategies Available to Mitigate the Tax Consequences of GILTI Inclusions
By Anthony Diosdi Introduction to the Global Intangible Low-Tax RegimeThe 2017 Tax Cuts and Jobs Act dramatically changed the way outbound international transactions are taxed. The Tax Cuts and Jobs Act retained the existing Subpart F tax regime, but it also created a new class of taxable income known as global intangible low-taxed income (”GILTI”). Internal Revenue Code Section 951 authorizes GILTI. GILTI was intended to impose a current year tax on income earned from intangible property that was subject to no or a low tax rate offshore. GILTI is defined as the residual of a controlled foreign corporations (CFC’s) income (excluding Subpart F income or income that is effectively connected with a U.S. trade or business, and certain other classes of income) above a 10 percent return on the…