IRS Expands High-Tax Exclusion Under Global Minimum Tax (1)

The IRS released proposed rules that expand a high-tax exclusion for multinationals that have been unintentionally hit by an international provision meant to ensure companies pay a minimum tax on offshore profits in low-tax countries.

The proposed regulations (REG-101828-19) issued June 14 include guidance under tax code Section 958 for determining stock ownership and Section 951 on a new category of foreign income—global intangible low-taxed income.

A tax on GILTI ensures that companies pay 10.5% on offshore profits that aren’t already taxed at a rate of at least 13.125%. The levy applies to income that U.S. ...