On September 13, 2018, the US Internal Revenue Service released the first set of proposed regulations addressing how to compute the new tax imposed on global intangible low-taxed income or “GILTI.” The GILTI rules were enacted in the Tax Cut and Jobs Act in December 2017, and GILTI is taxable beginning in 2018. GILTI is a newly designated type of income that is earned by controlled foreign corporations and is taxable to US shareholders. GILTI inclusions are not limited to passive income nor are they limited by the earnings and profits of the CFC. Mark Leeds and Lucas Giardelli of the New York office of Mayer Brown analyze the proposed regulations in the Legal Update “GILTI Pleasures.”
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