Section 951A, which was added by the Tax Cuts and Jobs Act (TCJA) enacted in December, 2017, subjects a current US tax on a U.S. shareholder’s pro rata share of its global intangible low tax income (GILTI).
Under the TCJA, a U.S. person that owns at least 10 percent of the value or voting rights in one or more CFCs will be required to include its global intangible low-taxed income as currently taxable income, regardless of whether any amount is distributed to the shareholder. A U.S. person includes U.S. individuals, domestic corporations, partnerships, trusts and estates.
Per IRS news release 2018-186, the new reporting rules requires the filing of Form 8992. The Form would be helpful for U.S. Shareholder Calculation of Global Intangible Low-Taxed Income.
The new law applies to the first tax year of a CFC beginning after Dec. 31, 2017, and the U.S. shareholder’s year with or within which that year ends, and all subsequent tax years.
These proposed regulations do not include foreign tax credit computational rules relating to global intangible low-taxed income, which will be addressed separately in the future as the release further states.
CPA Global Tax team can help you navigate through to the maze of these complicated rules. Please email us for any assistance.