The Resource Foreign tax credit planning : the potential benefits of Subpart F income

Foreign tax credit planning : the potential benefits of Subpart F income

Label
Foreign tax credit planning : the potential benefits of Subpart F income
Title
Foreign tax credit planning : the potential benefits of Subpart F income
Creator
Subject
Language
eng
Summary
Recent U.S. tax reform, notably, the new Global Intangible Low Tax Income (GILTI) regime, will reduce opportunities for U.S. taxpayers to utilize foreign tax credits (FTCs) to avoid double tax on foreign earnings. In particular, the lower U.S. corporate tax rate of 21% means less U.S. tax for FTCs to offset. FTCs with respect to GILTI are haircut by 20%. Cross-crediting, or utilizing excess FTCs from high-taxed foreign earnings to offset incremental U.S. tax on low-taxed foreign earnings, also will be more difficult with the addition of separate limitation categories under Code Sec. 904 for foreign branch income and GILTI. The good news is that there may be opportunities for taxpayers to better utilize FTCs, even in the near term, with no changes or relatively modest changes to their structures. This article first addresses how FTCs now apply to Subpart F income and GILTI, post-U.S. tax reform. It then discusses circumstances where earning Subpart F income may lead to additional FTC benefits. Finally, it examines possible approaches for generating Subpart F income to capture these benefits
Citation source
In: International tax journal. - Riverwoods. - Vol. 44 (2018), no. 5 (September-October) ; p. 17-28
http://library.link/vocab/creatorName
  • Lipeles, S.R
  • Weber, J. Skubis
  • Kroll, E.S
  • Siu, I.Y
Geographic coverage
North America
Language note
English
http://library.link/vocab/subjectName
  • foreign tax credit
  • Subpart F income
  • GILTI
  • tax reform
  • carry-over
Label
Foreign tax credit planning : the potential benefits of Subpart F income
Instantiates
Publication
Label
Foreign tax credit planning : the potential benefits of Subpart F income
Publication

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