Page 13 - Tax Reforms - Businesses

Global Intangible Low-Taxes Income (5/9)

Global Intangible Low-Taxes
Income

Under the law, a U.S. person that owns at least 10
percent of the value or voting rights in one or more
controlled foreign corporations will be required to
include its global intangible low-taxed income as
currently taxable income, regardless of whether any
amount is distributed to the shareholder.

Refer to Notice 2019-46 announces that the
Department of the Treasury and the Internal Revenue
Service intend to issue regulations that will permit a
domestic partnership or S corporation that is a U.S.
shareholder of a controlled foreign corporation to
apply proposed §1.951A-5, related to the treatment of
domestic partnerships and S corporations for
determining the amount of the global intangible low-
taxed income inclusion, for taxable years ending
before June 22, 2019.

The notice also addresses the applicability of penalties
for a domestic partnership or S corporation that acted
consistently with proposed §1.951A-5 on or before
June 21, 2019, but files a tax return consistent with the
final regulations under §1.951A-1(e).

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