• Monte Silver, Tax lawyer


Major Positive Development RE GILTI

If you are an expat operating a small business abroad, you are probably aware of GILTI – one of the two terribly complex taxes created by the Tax Cuts and Jobs Act in 2017. We have been fighting to protect small businesses from this tax. Two months ago we got our first permanent relief from Treasury: the same tax breaks and tax credits that Google gets, if we make the 962 election. This relief would result in most of us paying NO GILTI tax, but still required us to comply with GILTI filings each year.

Two days ago Treasury issued a new proposed regulations regarding GILTI with a much bigger announcement. If you live in a country that has a corporate tax rate of 18.9%, and if your company’s profits are taxed at that rate, then all of that income is not even considered GILTI income. Meaning -no filing obligation at all!!

For example, my company earns income and has expenses. The net corporate profit is taxed at 23% in Israel. Accordingly, none of my corporate income is considered GILTI income. The result? I have zero GILTI income and I do not have to comply with GILTI at all. All I need to do if file a one-time statement/election with my next tax return and that is it.


Of course, the new relief is still only a proposed regulation and we must wait for the final regs to be issued. But it is safe to say that if you live in a country where the corporate tax is at least 18.9%, then you can smile a very big smile today.

Nothing in this post constitutes legal advice

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