Topic
Prior Tax Law ( 2017 )
Current Tax Law ( 2018 )
Foreign Tax Credit Provide a separate IRC 904 limitation “ basket ” for foreign branch income
Subpart F definition
Global intangible low-taxed income (“ GILTI ”)
Base erosion and anti-abuse tax (“ BEAT ”)
Foreign Derived Intangible Income (“ FDII ”)
Intangible property
10 % or more of the combined voting power
Expand subpart F definition of “ US Shareholder ” to include US person who owns 10 % or more of the value of a foreign corporation .
US shareholder of CFCs include in gross income its GILTI . Partial credits for foreign taxes attributable to GILTI amount ; 50 % deduction for C corporation owner
Imposes , on a corporation that is an “ applicable taxpayer ” (>$ 500M in revenue ), a tax equal to its “ base erosion minimum tax amount ” (“ BEMTA ”)
New 37.5 % deduction for C-corporations on FDII ( i . e . export sales and services which exceed a fixed return on fixed assets )
Amend the definition of intangible property to include workforce in place , goodwill , and going concern
Proposed Changes
FTC computed on country-by-country basis . Elimination of the foreign branch “ basket ”
Change to definition of foreign base company sales income
GILTI computed on country-by-country basis ; GILTI deduction drops to 28.5 %; GILTI deductions in excess of taxable income can be included in NOL
Increases minimum BEAT from 10 % to 18 %, progressively , beginning in 2023
Reduces deduction to 28.5 %; FDII in excess of taxable income can be included in NOL
No change
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