Читать книгу International Taxation - Adnan Islam - Страница 22

 Summary: minimum (that is, generally 10.5% to 13.125%) U.S. income tax on CFC’s annual, computed income, determined after Subpart F income

 The effect of the GILTI provision is to subject U.S. shareholders of CFCs to current taxation on the aggregate net income of the CFCs over a routine return.

 The GILTI provision applies to the tax years of a CFC that begin after December 31, 2017, and to U.S. shareholders of such CFC in which or with which such tax years of the CFC end.

 U.S. corporate shareholders of CFCs (but not individuals, partnerships, or S corporations) are allowed to deduct 50% of GILTI for tax years beginning after December 31, 2017, and before January 1, 2026, and 37.5% of GILTI after 2026.

 U.S. corporate shareholders of CFCs can also claim a foreign tax credit with respect to included GILTI amounts, but such foreign tax credit is limited to 80% of the foreign tax paid, and any unused FTCs cannot be carried forward or carried back to other tax years.

 U.S. individual shareholders of CFCs that implemented the Section 962 election pursuant to the Regulations released in 2019, (a) will also be allowed to deduct 50% of GILTI for tax years beginning after December 31, 2017, and before January 1, 2026, and (b) may claim a foreign tax credit with respect to included GILTI amounts, but such foreign tax credit is limited to 80% of the foreign tax paid, and any unused FTCs cannot be carried forward or carried back to other tax years.

 The objective or hope was for the U.S. Treasury to impose an effective tax rate (ETR) of 10.5% to 13.125% on each CFC’s annual income (subject to complex regulatory computations), to the U.S. shareholders.