Treasury and the IRS on June 14, 2019 released 318-page final regulations (the Final Regulations) and 74-page proposed regulations (the Proposed Regulations) under Section 951A as enacted by the 2017 tax reform legislation (the Act) and provisions related to implementing Section 951A. The Final Regulations and Proposed Regulations provide guidance relating to a US shareholder's pro rata share of its global intangible low-tax income (GILTI).
Although the Final Regulations generally follow the structure and approach set forth in the 2018 Proposed Regulations, there are significant modifications that are likely to impact a taxpayer’s GILTI tax calculation. Taxpayers should also consider the modifications proposed in the Proposed Regulations as they could have a significant impact in the future.
Taxpayers should immediately review the Final Regulations and Proposed Regulations to determine whether their GILTI and Section 965 tax liability may be affected.