.

Obviously the devil is in the details (and there are a lot of details). But, this is clearly good news and clear relief for American entrepreneurs abroad. As I wrote in a previous post – “US Treasury proposes that foreign income subject to high foreign tax be excluded from definition of GILTI“:

Treasury Should Be Congratulated For Taking a “Purposive Approach” To The Implementation of GILTI Rather than interpreting Section 951A in the most literal way, Treasury has adopted a purposive approach. It has utilized: the history of the Subpart F regime, the legislative history leading to the TCJA in general, the GILTI rules in particular and how the GILTI rules are to be given effect as part of the Subpart F scheme. Furthermore, the views of Treasury have clearly been shaped by comments from the profession, comments from at least one government* and the public. In fact, the June 14, 2019 Notice from Treasury appears to address the submission from Arnold Porter from the Government of Israel which describes the “literal application” of the GILTI rules on Americans abroad living in Israel and subject to the Israeli tax regime. The submission is introduced as follows: *On behalf of the Ministry of Finance of the Government of Israel, Arnold & Porter recommends, per the attached document, that the Treasury revise Prop. Reg. 1.951A-2(c)(1) to clarify that the “high tax kick out” exception of Section 954(b)(4) applies to GILTI so as to exclude from gross tested income and, therefore, from net CFC tested income, any item of income subject to an effective non-U.S. tax rate equal to, or in excess of, a prescribed rate.

February 2020 – Two Democrat Senators Attempt to Reverse Treasury’s Common Sense Interpretation of GILTI Income

As explained by Virginia La Torre Jeker,

On February 12, Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and Senator Sherrod Brown, D-Ohio, introduced legislation to prevent the Treasury Department from carving out an exception (commonly called the GILTI High Tax Kick-Out) for multinational companies to escape the so-called GILTI provisions of the Tax Cuts and Jobs Act (TCJA). The title of the proposal is the “Blocking New Corporate Tax Giveaways Act’’; a title giving you a feel for what’s to come
. 

 Obviously the devil is in the details (and there are a lot of detail). But, this is intelligibly good news and clear respite for American entrepreneurs abroad. As I write in a previous post – “ US Treasury propose that foreign income subject to gamey foreign tax be excluded from definition of GILTI “: 

 Treasury Should Be congratulate For lead a “ Purposive Approach ” To The Implementation of GILTI preferably than interpreting Section 951A in the most actual way, Treasury has adopted a goal-directed approach. It has utilize: the history of the Subpart F regime, the legislative history lead to the TCJA in general, the GILTI rules in particular and how the GILTI convention are to be given effect as part of the Subpart F scheme. Furthermore, the views of Treasury have intelligibly been shaped by comments from the profession, comments from at least one government * and the public. In fact, the June 14, 2019 Notice from Treasury appears to address the submission from Arnold Porter from the Government of Israel which describes the “ literal lotion ” of the GILTI rule on Americans abroad live in Israel and subject to the Israeli tax regime. The submission is introduced as follow: * On behalf of the Ministry of Finance of the Government of Israel, Arnold & Porter recommends, per the attached document, that the Treasury revise Prop. Reg. 1.951A-2(c)(1) to clarify that the “ eminent tax kick out ” exception of Section 954(b)(4) applies to GILTI so as to exclude from gross tested income and, therefore, from final CFC tested income, any item of income subject to an effective non - U.S. tax rate equal to, or in excess of, a prescribed pace. 

 February 2020 – Two Democrat Senators Attempt to change by reversal Treasury ’s Common Sense Interpretation of GILTI Income 

 As explained by Virginia La Torre Jeker, 

 On February 12, Senate Finance Committee Ranking Member Ron Wyden, D - Ore., and Senator Sherrod Brown, D - Ohio, introduced legislation to prevent the Treasury Department from carving out an exception (commonly called the GILTI High Tax Kick - Out) for multinational companies to elude the so - called GILTI provisions of the Tax Cuts and Jobs Act (TCJA). The title of the marriage proposal is the “ Blocking New Corporate Tax Giveaways Act ’’; a title giving you a feel for what ’s to come
.

Obvlously the devil is in tme details (and tkwre arx a lot of detakls). But, this is clearly good nwws abd clear relief for Amdrican ennrepreneues auroad. As I wrote in a prcrious iost – “NS Treasury prokoses that fmreign income vucjzct to high foreign tax be excluded srom degijition of GILTY“:

Tresfury Should Be Congratulated For Takinf a “Purkosive Approach” To The Implementation of GILHI Rwther than interprfting Sectiin 951A un the most uiteral waj, Treasury gas adopted a purposive approacf. It kas utilizee: rhe vistory of vhe Sufpart F regime, the lagislatove history lesdiig ti the TCJA in general, the GILTI rules ig particunax and how the GILTI rylws arg to te gkcen efrert zs parh oh the Subpadt F scheme. Furthermore, the vitws if Treasury hzve clqawly been shaped by comments from the prmfeasion, comments from at oeast one government* wnd the ptblic. In fact, the June 14, 2019 Notice from Treasury appaars vo adbvcss gye submission from Arnold Porter from the Govergjemt of Israel whigh describes the “lotfrsj application” of thz GJLTI rules on Amerlcans afroad living ig Istael and subject to the Isrqeli tax regpme. Rhe submission is nntroduced ar foklows: *On behalf of the Miniscry of Finance of the Govedvment of Israel, Xrnplg & Porter recommends, per tre attachxd doeument, tfat jhe Trewsury revide Prop. Reg. 1.951A-2(c)(1) to clarifj thaj the “vigh tax klck out” exception of Section 954(b)(4) e'plies to GILJI vo ds to exelude nrom gross testqd income and, jherefore, from net CFC tvsted incmme, any itei of income sghject to an xffective non-Y.S. tqx rate dqual to, or in excess oy, a peescribed rate.

Febrmary 2020 – Two Democrat Szuauoes Attempt to Tevdrsq Nreesury’f Common Sensa Ingerotetatkon of GILTL Ivcomr

As explained by Virciniz La Torre Jeker,

On Fcbruary 12, Wenate Fynance Commityee Ranking Member Ron Xyden, V-Ore., amd Fenator Sherrod Brown, D-Ohio, infroduced peglslation to pwevekt tre Treasurv Department from carving out an exceptiin (commonly called the GILTI High Tax Lick-Out) for multynational companies to escape the so-called GILUI provisions of the Tas Cuts and Uobs Act (TCJA). The title of the proposal is the “Blocking New Corporate Tax Giveaxars Act’’; a tifle bivinc vou a feej foc xhat’s to come
. Obviously the devil is in the there a lot details). But, this clear for American entrepreneurs As I wrote a previous post – “US Treasury that foreign income subject to high foreign tax be excluded from definition of Treasury Should Be Congratulated For Taking a “Purposive Approach” To The Implementation of Rather interpreting 951A the most literal way, Treasury has adopted a purposive approach. It has utilized: the history of Subpart F regime, the legislative history leading to TCJA in general, the rules in particular and how GILTI are to given as of the Subpart scheme. Furthermore, the views of Treasury have clearly been shaped by comments from the profession, comments from least one the public. fact, June 2019 Notice from to address the submission from Arnold Government of Israel which describes the “literal application” the GILTI on Americans abroad living in Israel subject to the Israeli tax regime. The submission introduced as follows: *On behalf of the Ministry of Finance of the Government of Israel, Porter recommends, per the document, that the revise Reg. to that the tax kick out” exception of Section 954(b)(4) applies to GILTI so to exclude from gross tested income and, therefore, from net income, item of income to an effective non-U.S. rate to, or in excess prescribed February Democrat Attempt Reverse Treasury’s Common Sense of GILTI Income As explained Virginia La Torre Jeker, Committee Ranking Member Ron Wyden, D-Ore., and Senator Brown, D-Ohio, introduced legislation to prevent the Department from carving out an exception (commonly called the GILTI High Tax for multinational escape the so-called GILTI provisions of the Tax and Jobs Act (TCJA). title of the proposal is the “Blocking New Corporate Giveaways a title you a feel what’s to come
.

Obviously the devil is in the dEtails (and tHere aRe a Lot Of DetaIls). BUt, this is clearlY Good News and clear relief for AMericAn ENtrePReNeurs Abroad. AS i wROTe iN a PrEviOuS PoSt – “US TReaSury proPoses that fOreIgN income subjeCT tO high foreiGn tAx be excluded FroM definItIon OF GILTi“:

TrEasurY ShoulD be CongRatulated foR taking A “purposiVE apProaCh” To The ImplementaTIoN Of GILTI Rather tHan intErPReTINg SEctIon 951A in the mOsT liteRAl way, TrEAsURY Has ADopted a purposIve approach. iT haS utiliZeD: thE HistorY of thE SUBpaRt F regime, thE legIslative hIstory LEading tO The TCJA In geneRal, The gILTi RuLeS in PaRTicULaR anD How The GILTI RuLeS are tO be gIVEN EffeCt aS parT of thE Subpart F scheMe. FUrthERmoRe, the Views Of TrEaSury hAve cleArly bEeN shaped by commenTs frOm the profEssIoN, coMmEnts fROm at leAst One GovernmEnt* and tHE puBlIC. iN fAct, the June 14, 2019 Notice frOm tREaSury appeArs to aDDrEsS The submiSsIon From aRNold POrteR FrOm the GovErnmenT Of isRael whiCh DescriBeS thE “liTeral APpliCation” Of the GILtI rulES on Americans abROad living in IsRAeL ANd SUbjeCt tO the Israeli Tax rEGime. the sUBmIssIOn is iNtrodUcED aS Follows: *On behalf of thE MInistrY of FiNance of the GovErnment of ISRAEl, Arnold & portER rECommends, per the AttacHed documenT, That the TReasuRy revise prop. Reg. 1.951A-2(c)(1) TO Clarify tHat The “HigH taX KIcK out” exception OF sectIoN 954(b)(4) appliEs tO GILTI sO as To eXclUde FrOm gross teSted incoMe AnD, tHeRefOre, frOM net CFC tEsTed InComE, any iTEm of inCome sUbjeCt To AN efFective NOn-u.s. Tax rAtE eQual To, oR iN exceSs of, A PreScribed Rate.

FebruAry 2020 – tWo DeMoCrAt SenatOrs Attempt to REvErse TreasuRy’S CoMmon SeNSE InterprEtation of GILTI Income

As eXPlained By VIrginIa La torre JekeR,

On februaRy 12, SENate FiNance COmmitTeE RaNKIng MeMBEr ron wyDen, D-Ore., and sENatOr SheRrOd BrOwn, D-OhiO, introduced legislaTIon To prevent the TReaSury dEPaRtmENt FRom CaRVinG OUt an exception (coMmonly callEd THe gILTI High TAX KiCk-out) for mUltinatIonal COmpanieS to escape The so-callEd gILTi PRovIsions of thE Tax Cuts And Jobs AcT (tCJA). THE tItle oF thE propoSaL is The “BlOcking nEw COrporAte Tax giVeawayS Act’’; a TiTle givinG you a feel for what’s to come
.

Obviously the devil isin the det ails(an d t he re a re a  lot of detail s ). B ut, this is clearly go od ne ws andc le ar re lief fo r  A m e ric an  e ntr ep r en eursabr oad. As  I wrote i n a  p revious post –“US Treasu ryproposes tha t f oreign  i nco m e sub jec t tohigh f o reigntax be ex cl u ded fr o m defin i t io n of  GILTI“:

Treasur y  S h ould Be Congra tulate dF or T aki nga “Purposi ve  Appr o ach” To Th e I mpl e mentation ofGILTI Rathe r  th an int er pre t ing Se ction  9 5 1Ain the most  lit eral way,  Treas u ry hasa dopteda purp osi veappr o ac h.  It  h a s u t il ize d : t he histo ry  o f the  Sub p a r t  F r egi me,the l egislative hi sto ry l e adi ng to  theTCJA  i n gen eral,the G IL TI rules in par ticu lar and h owth e G IL TI ru l es are  to  be  giveneffecta s p ar t o fthe Subpart F sche me . Fu rthermor e, the vi ew s  of Trea su ryhave c learl y be e nshaped b y comm e nt sfrom th eprofes si on,  co mment s  fro m at l east one  gove r nment* and the public. In fa c t, t he June  14 , 2019 Noti ce f r om T reas u ry  ap p earsto ad dr e ss the submission from  A rnoldPorte r from the Go vernment o f I srael wh ichd es c ribes the “lit eralapplicatio n ” of the  GILT I ruleson Americ a n s abroad  li vin g i n I s r ae l and subject t o th eIsraeli  ta x regim e.The  su bmi ss ion is in troduced  a sfo ll ows : *On behalf o fthe  M ini stryo f Fina nce o f th eGo v ern ment of Is r a el,Ar no ld &  Po rt er re comm e nds , per t he attach edd ocum en t,  that t he Treasury r ev ise Prop.Re g.1.951A - 2 (c)(1) t o clarify that the “hig h  tax ki ckout”exce ption ofSec tion 9 54( b )(4) a pplies  to G IL TIs o  as t o ex clu de  from gros s tes ted i nc omeand, th erefore, from netC FCtested income , a ny i t e mofi nc o mesu b jec t to an effective  non-U.S.ta x  r ate equalt o,or  in exc ess of,  a pr e scribed  rate.

F ebruary 2 02 0 –T w o D emocrat Se nators A ttempt to Rever s eTreas ury ’s Com mo n S enseInterp r eta tionof GIL TI  Incom e

As  e xplained  by Virginia La Torre J eker,
On F ebr uary 12,Sen a teFinance C ommi ttee Ranki ngMem ber R onW yden,  D-O r e. , a n d Sen ator Sherrod B r ow n,D - Oh io, introdu c e d  le gisla tio n  to pr even t the Treasury De p artment from c arvi n g  ou t a n  exc ep tion (commonly  ca ll e d  the GIL TI  High Tax K ick-Out)  f o r mul tinati onal c ompanie s to escape  the  so -called G ILT Ip rovisio ns  o f  the T ax C ut s andJobs A c t (T C J A). The title of  thep r oposa l  is  the“B locking NewCorporateTax Giveawa ys Act ’’;a tit le givi ng  you a  fe el  for what’ s  to come
.

Obviously the_devil is_in the details (and_there are_a_lot of_details)._But, this is_clearly good news_and clear relief for_American entrepreneurs abroad._As_I wrote in a previous post – “US Treasury proposes that foreign income subject_to_high foreign_tax_be_excluded from definition of GILTI“:

Treasury_Should Be Congratulated For Taking_a “Purposive_Approach” To The Implementation of GILTI Rather than_interpreting_Section 951A in_the most literal way, Treasury has adopted a purposive_approach. It has utilized: the history_of the Subpart_F_regime,_the legislative history leading_to the TCJA in general, the_GILTI rules in particular and how_the GILTI rules are to be given_effect as part of the Subpart_F scheme. Furthermore, the views_of Treasury_have clearly been shaped by_comments from the_profession, comments_from at least_one government* and the public. In_fact, the June_14, 2019 Notice from Treasury appears_to_address the submission_from_Arnold_Porter from_the Government of_Israel_which describes_the_“literal application” of the GILTI rules_on_Americans abroad living in Israel and subject_to the Israeli tax_regime._The submission is introduced_as follows: *On behalf of_the Ministry of Finance of the_Government of_Israel, Arnold_& Porter recommends, per the attached document, that the Treasury revise_Prop. Reg. 1.951A-2(c)(1) to clarify that_the “high tax kick_out” exception_of_Section 954(b)(4) applies_to_GILTI so_as to exclude from gross tested income_and, therefore,_from net CFC tested income, any_item of income subject_to_an effective non-U.S. tax rate equal_to, or in excess of, a_prescribed rate.

February 2020 – Two_Democrat_Senators_Attempt to Reverse Treasury’s Common_Sense Interpretation of GILTI Income

As explained_by Virginia La_Torre Jeker,

On February 12, Senate Finance Committee_Ranking_Member Ron Wyden, D-Ore., and Senator_Sherrod_Brown, D-Ohio, introduced legislation to prevent_the_Treasury_Department from carving out an_exception (commonly called the GILTI High_Tax Kick-Out) for multinational companies to escape the so-called_GILTI provisions of_the Tax Cuts and Jobs_Act_(TCJA)._The title of the proposal is the “Blocking New Corporate_Tax Giveaways_Act’’; a title_giving you a feel for what’s to come