Proving the U.S. Tax Efficiency of the GILTI High-Tax Exception

January 14, 2021

The Tax Cuts and Jobs Act (TCJA) brought significant changes to the U.S. international tax rules in December 2017. A new GILTI reporting rule currently applies to U.S. shareholders of controlled foreign corporations (CFCs). GILTI prevents U.S. shareholders from deferring U.S. federal tax on earnings of CFCs. U.S. shareholders of CFCs are subject to GILTI tax on undistributed earnings of CFCs. With the issuance of tax regulations to implement the U.S. international tax reform rules, the IRS has made some important GILTI planning opportunities available to U.S. taxpayers.

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