Late last week proposed regulations relating to GILTI were released. GILTI is an area which continues to attract attention given its impact on US owners of non-US corporations.
The proposed regulations have clarified a number of computational questions. Unfortunately, we are left waiting a little longer to receive the full picture covering the more important aspects to our clients, such as the ability to credit foreign tax or on a general deduction which reduces the impact of GILTI. The IRS intend to publish these regulations separately – the timeframe mentioned to do so is within the next 60 days.
For many of the US individuals affected, those further regulations will be key to determining the extent of their exposure to GILTI, and their ability to plan to avoid potential double tax.