The Treasury and IRS recently issued proposed regulations under §951A.1 The regulations provide rules for determining the amount of the inclusion in a U.S. shareholder’s gross income of global intangible low-taxed income (GILTI).
The GILTI inclusion amount is the aggregate of a U.S. shareholder’s pro rata shares of tested income less tested losses from each directly and indirectly owned controlled foreign corporation (CFC), less 10% of its aggregate pro rata shares of qualified business asset investments (reduced by certain interest expense). 2 This article discusses the rules in the proposed regulations for determining a CFC’s tested income.
Originally published in Bloomberg Tax: Tax Management International Journal, November 2018.