Global Intangible Low-Taxed Income: Final Regulations Explained

Summary

This practice note focuses on the final regulations issued by the Internal Revenue Service (IRS) and the Department of the Treasury (Treasury) under I.R.C. Sections 951, 951A, and 954 on July 20, 2020 under the global intangible low-taxed income (GILTI) regime. The final regulations addresses the treatment of income earned by certain foreign corporations that is subject to a high rate of foreign tax. To understand the final GILTI regulations, this analysis also contains background on the proposed regulations issued in 2019 regarding the GILTI high-tax exclusion. Note that the final GILTI regulations are largely consistent with the proposed GILTI regulations released in 2019, with some important modifications.