Page 304 - International Taxation IRS Training Guides

Outbound Transaction Example and

GILTI (Post-TCJA)

GILTI Effect

USP US parent corporation wholly

IP owns two foreign corporations

Goods Goods (“High Tax Co”) and (“Low Tax

Co”)

• USP performs
CFC1 CFC2

(High Tax) (Low Tax) manufacturing
the global IP
• USP owns

• USP transfers IP to
Goods Goods offshore foreign affiliates

widgets to
• USP sells

High Tax Co and Low
Customers Customers
Tax Co based on a
resale minus

• The overall foreign tax
rate is 27%

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