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GILTI Tax Compliance

A U.S. shareholder of one or more Controlled Foreign Corporation (CFC) shall include in gross income its “global intangible low-taxed income” (GILTI) in a manner similar to subpart F income. The effect of this rule is to subject a U.S. shareholder to a tax on the combined net income of its CFCs that (1) is not otherwise taxed un the U.S. on a current basis and (2) exceeds a fixed routine return on the CFC’S associated business assets.

Some terms you need to understand in order to calculate the GILTI.

  • Tested income
  • Tested loss
  • Shareholder’s net deemed tangible income return
  • Net CFC tested income
  • QBAI
  • Tested foreign income taxes

We are frequently approached with client requests to assist with GILTI Tax Compliance. Some common questions are:

  • Does GILTI apply to me?
  • I have several lines of business – how do I apply GILTI tax to only one portion of my business?
  • Is GILTI shown on my form 5471? What other forms do I need to complete?
  • What is the percentage tax on GILTI?
  • I am thinking of creating a foreign subsidiary. What can I do to make sure that GILTI does not apply to me?
  • I just realized that I have been filing my tax incorrectly last couple years. What can I do to correct the situation? How can I avoid penalties for non-compliance?

For these questions and any others regarding GILTI Tax, please contact us below and we will respond within hours.

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