GILTI - Global Intangible Low-Tax Income EXPLAINED: An intro

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More on what GILTI is: https://www.irsmedic.com/blog/2018/08...
How to avoid GILTI: https://www.irsmedic.com/blog/2018/12...


What is GILTI really?

We will be getting into the specifics of what GILTI is, but first, we need to understand what its purpose was as that will help us figure out situations in which we should expect to see GILTI liabilities pop up.

In 1962 Subpart F was passed to treat passive income overseas harshly. Subpart F is a vile nasty piece of work. But I guess Congress really liked it. Someone then got the idea that if Subpart F could be so effective in ruining most offshore tax planning, well then could we create some sort of taxing regime to hammer active income earned overseas?

The answer is yes and GILTI is its name. The purpose of GILTI is to hammer active income of foreign businesses that are controlled by US shareholders. GILTI can hammer them so hard, that for some people, having their income taxed as Subpart F could even be better than GILTI!

Oh and by the way, Tax Reform also expanded the definition of what it means for a shareholder to be subject to not just controlled foreign corporation rules that is CFC rules in addition to GILTI regime.

Be sure to subscribe as these are these the topics we will be covering in future videos.

How to avoid GILTI
How to calculate GILTI
GILTI vs Subpart F
GILTI regualtions
GILTI v transition tax
GILTI & NIIT
GILTI & BEAT
GILTI & Intellectual property
GILTI & Tangible property
GILTI and Section 250 deductions
GILTI and foreign partnerships



GILTI does not just affect huge corporations overseas, but small and medium sized businesses, and it can even affect someone who is self-employed. Now for some people with income earned abroad, GILTI won’t affect them all that much. But, it could take some real meaningful research and analysis to properly answer that question. For our larger clients, the cost may not be all that noticeable, but I can tell you that for our clients who are working hard to create something for themselves, this amount of research is pushing many beyond their breaking point, forcing them to make a decision they wish they didn’t have to. Just getting a GILTI analysis can cost more than what a taxpayer’s tax bill is.


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How to mitigate GILTI: https://www.irsmedic.com/blog/2018/12...
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