GILTI: The Co-operative Potential of a Unilateral Minimum Tax
2019 Brit. Tax Rev. 512
27 Pages Posted: 13 Nov 2019 Last revised: 13 May 2020
Date Written: October 28, 2019
Prior to the Tax Cuts and Jobs Act of 2017 (TCJA), the US allowed US parented multinationals to delay indefinitely their payment of US corporate income tax on non-US income earned by non-US corporate subsidiaries (CFCs). The TCJA revoked this permission through the enactment of a unilateral, current minimum tax on the “global intangible low-taxed income” (GILTI) of CFCs. The post-TCJA US international tax law generally imposes current US tax on CFC income subject to reductions for foreign income taxes paid or accrued. This US regime supports the continued existence of a corporate income tax and presents an opportunity to co-ordinate the details of corporate income tax systems globally. Similarity among systems, for instance with respect to rate, timing and base, would further strengthen the corporate income tax and perhaps support innovations such as formulary apportionment. US tax administrators, non-US governments and taxpayers will each play a role in negotiating the details of international corporate income tax law going forward and in determining whether and on what terms these details converge.
Note: “This material was first published by Thomson Reuters, trading as Sweet & Maxwell, 5 Canada Square, Canary Wharf, London, E14 5AQ, in the British Tax Review as GILTI: The Co-operative Potential of a Unilateral Minimum Tax  BTR, No. 4 and is reproduced by agreement with the publishers”.
Keywords: TCJA, GILTI, minimum tax, cooperation, corporate income tax
JEL Classification: K33, K34, H25
Suggested Citation: Suggested Citation