Page 385 - Large Business IRS Training Guides

GILTI and FDII

Side-by-Side

GILTI and FDII are like two sides of the same coin

deals with GILTI & FDII
• IRC 250(a)
• GILTI
definition is from IRC 951A
definition is from IRC 250(b)
• FDII

GILTI
looks at deemed excess foreign FDII looks at similar deemed
returns (deemed attributable to excess
domestic returns that are
intangibles) considered foreign-derived

Domestic corporations (excluding Domestic corporations (excluding

RICs, RICs,
REITs, and S Corporations) are
REITs, and S Corporations)
to a reduced rate of
equal
allowed a deduction generally are subject
on their FDII through IRC 250
after 2025) of their
to 50% (or 37.5% tax
GILTI
inclusion under section 250 that deduction of 37.5% of FDII
results in GILTI
being subject to an
effective U.S. tax rate of 10.5%
until
2025 (13.125% after
2025)

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