What’s the only way to make sure your controlled foreign corporation (CFC) is paying the necessary taxes? Well, in order to be legal, you better prepare to be GILTI.
Before the 2017 Tax Cuts and Jobs Act (TCJA), one could defer the US taxes on their foreign business earnings until the money was repatriated to the United States. But, the Global Intangible Low-Taxed Income (GILTI) provision broadened the scope of earnings that fall under US taxation, whether they are distributed to a shareholder or not.
Savvy CFC investors can take advantage of ways to reduce their GILTI guilt. This requires careful consideration of tax rates & credits available to US shareholders. So, as usual, the only way to escape being GILTI is taking advantage of legal loopholes. What else is new?
