Global Intangible Low-Taxed Income and Form 8992 (Completed)

This webinar's focus is on the Global Intangible Low Tax Income ("GILTI"). The GILTI is an outbound anti-base erosion provision. GILTI reduces the incentive to shift corporate profits out of the United States via base shifting a corporation's principal asset, intellectual property ("I.P.").

The GILTI is an outgrowth of the Tax Cuts and Jobs Act of 2017 ("TCJA"), the United States congressional revenue act that amended the Internal Revenue Code of 1986. Significant changes included reducing tax rates for businesses and individuals, reducing the alternative minimum tax ("AMT") for individuals, and eliminating AMT for corporations.

The GILTI rules were created by the TCJA and operated as a worldwide precaution to the territorial-style regulations adopted by the tax reform legislation. Further, the GILTI provisions augment the current anti-abuse regime known as Subpart F. After determining a CFC's Subpart F income, U.S. shareholders have to decide whether they are subject to tax on the CFC's GILTI. The new territorial participation exemption does not spare foreign income classified for U.S. tax purposes as Subpart F or GILTI.

The GILTI is the U.S. response to a global focus on "base-shifting" since 2015, when the OECD finalized the Base Erosion and Profit Shifting ("BEPS") initiative. These initiatives' primary focus is shifting taxable income to low tax and haven countries via Intellectual Property ("I.P.") exploitation. Often, in today's high tech, digital, and online economy, the most valuable and profit-generating assets owned by a firm is its I.P. Judicious tax planning enables a Multinational Company to earn income from exploiting these assets low tax countries shielding them from taxation.

Who Should Attend
Tax Directors, Tax Staff, Transfer Pricing Practitioners, Treasury, Internal Audit, Tax Attorneys, CPAs and CFOs.

Topics Covered

• What is Section 951(A) and the transition tax under Section 965?
• Form 8992
• What is the update to Form 8992, which reflects a U.S. shareholder's calculation of specified interest expense using the netting approach under Treasury Regulation §1.951A-1(c)(3)(iii)?
• What is Foreign Derived Intangible Income ("FDII"), and how does it relate to GILTI?
• Participation exemption
• What are "supernormal" returns, or returns above 10 percent of qualified investments?
• What are the "net tested income" and the "Qualified Business Asset Investment" aspects of GILTI?
• "One CFC" approach of GILTI
• Effective Dates of the Regulations
• The future scheduled changes and associated impacts of GILTI

Learning Objectives

• Differentiate between International tax systems: worldwide, territorial, and destination-based
• Identify the relationship between section 951(A) and section 965's transition tax
• Recognize how to fill out form 8992
• Recognize the TCJA shift from a Global Tax to a Territorial One
• Identify the importance of the TCJA Participation Exemption
• Identify how GILTI and FDII incentivize U.S. Businesses to keep I.P. related profits in the U.S.
• Recognize and apply the Tax Planning Impacts of GILTI

Level
Basic

Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (1 hour)

Program Prerequisites
None

Advance Preparation
None