GILTI as Charged: How to Structure Successful U.S. Offshore Business Activities

The 2017 Tax Act introduced a ton of changes to the Internal Revenue Code, but arguably none bigger than the introduction of Global Intangible Low-Taxed Income (GILTI), which has turned completely upside down the US taxation of offshore business activities conducted through controlled foreign corporations (CFCs).

This Sullivan Tax Briefing, held in Boston on November 14, 2018, provided attendees with the good, the bad, and the ugly regarding the GILTI rules, and examined various strategies on how best to manage its curious and quirky provisions. Topics covered included the following:

  • How a US corporation can structure its operations to minimize the taxation of GILTI income
  • How a US corporation treats the portion of a CFC’s income that is not GILTI income and thus not subject to current tax – the continuing application of Subpart F, Code Sections 956 and 245A
  • Whether US individual taxpayers should elect to be taxed as corporations under Code Section 962
  • Whether US taxpayers other than C corporations should interpose a domestic US C corporation as a "blocker" to minimize current US income taxation
  • Whether US individuals, partnerships and S corporations owning a CFC should try to "check the box" all the way through and become one large pass-through entity that can take advantage of the direct tax credit for foreign taxes paid
  • How GILTI income is taxed (or not taxed) at the state level
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