2. Int'l Tax Update Significant Developments in the Global Tax System - Andrew Seidler

GILTI Example Calculation
GILTI Calculation
QBAI 200
Routine % of return – 10% 10%
Net deemed tangible return 20
Net CFC tested income 120
Net deemed tangible return (20)
GILTI 100
US Tax Calculation
GILTI 100
Allowed deduction (50% of GILTI) 50
US Taxable Income 50
Tax Rate 21%
US Tax (A) 10.5
Qualified business asset investment (“QBAI”):
Equals the CFC’s average aggregate adjusted bases
for specified tangible property.
Routine return is 10% x QBAI - Net Interest Expense
Interest expense less allocable interest income
taken into account in determining net tested income.
Net CFC tested income: The excess (if any) of the
aggregate tested income of each CFC less the
aggregate tested loss of each CFC.
Example assumes no foreign taxes paid – generally
80% of foreign taxes paid (subject to limitations) may
be available to offset US taxes paid on GILTI