GILTI (Global Intangible Low-Taxed Income)
A US tax on foreign income earned by Controlled Foreign Corporations in excess of a deemed routine return on tangible assets.
Detailed Explanation
Enacted under the Tax Cuts and Jobs Act, GILTI requires US shareholders of Controlled Foreign Corporations to include their share of GILTI as ordinary income, with corporations eligible for a partial deduction under Section 250. GILTI complicates international tax planning for US owners of foreign operating companies, particularly in low-tax jurisdictions. Reporting flows through Form 5471 and Form 8992.
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Form 5471 (Information Return of US Persons With Respect to Certain Foreign Corporations)
An informational return required of US persons who own or control foreign corporations, with significant penalties for failure to file.
Subpart F Income
Certain types of foreign income earned by Controlled Foreign Corporations that are taxed currently to US shareholders, regardless of distribution.
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