close
Share with your friends

Final regulations: “Global intangible low-taxed income” (GILTI) (text of regulations)

Final regulations: “Global intangible low-taxed income”

The U.S. Treasury Department and IRS this afternoon released final regulations (T.D. 9866) relating to section 951A and the “global intangible low-taxed income” (GILTI) provisions as added to the Code by the 2017 U.S. tax law (often referred to as the “Tax Cuts and Jobs Act”).

1000

Related content

Read the final regulations [PDF 666 KB] (83 pages) as published in the Federal Register on June 21, 2019.

The 2017 U.S. tax law (Pub. L. No. 115-97, enacted December 22, 2017) generally retained the existing subpart F regime that applies to passive income and related-party sales, but created a new, broad class of income—“global intangible low-taxed income” (GILTI). GILTI is deemed repatriated in the year earned and, thus, is also subject to immediate taxation. GILTI income is effectively taxed at a reduced rate while subpart F income is taxed at the full U.S. rate. In general, GILTI is the excess of all of the U.S. corporation’s net income over a deemed return on a controlled foreign corporation’s (CFC) tangible assets (10% of depreciated tax basis).

The final regulations provide guidance:

  • To determine the amount of GILTI included in the gross income of certain United States shareholders of foreign corporations, including United States shareholders that are members of a consolidated group
  • Related to the determination of a United States shareholder’s pro rata share of a controlled foreign corporation’s subpart F income included in the shareholder’s gross income, as well as certain reporting requirements relating to inclusions of subpart F income and GILTI
  • Related to certain foreign tax credit provisions applicable to persons that directly or indirectly own stock in foreign corporations

The final regulations are scheduled to be published in the Federal Register on June 21, 2019. The purpose of this report is to provide text of the regulations.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal