Baker McKenzie's North America Tax Practice Group has prepared a Client Alert on the final and proposed regulations to GILTI that Treasury and the IRS released on June 14, 2019.
While the final regulations largely follow the 2018 proposed regulations, they also provide clarity in a variety of substantive and technical areas, including the application of the "anti abuse" rule, the coordination of Subpart F deficits and GILTI and reserving on downward basis adjustments for shares in tested loss CFCs. Importantly, the regulations provide for the "aggregate" treatment of domestic partnership investments in CFCs and propose a newly expanded and highly anticipated "high tax" exception to GILTI.
The states also have provided more guidance on the treatment of GILTI. Please do not hesitate to contact the indicated authors of the alert or any member of our North America Tax Practice Group if you would like additional information or for further discussion of the issues addressed.