By Patrick McCormick (August 7, 2018, 3:08 PM EDT) -- As many are aware, United States taxpayers are typically taxed by the United States on worldwide income. This can be juxtaposed with treatment of foreign taxpayers, who are taxable only on income sourced to the United States. This disparity in scope of taxation has incentivized United States taxpayers to source income from global operations to non-United States jurisdictions; rather unsurprisingly, the United States has continuously sought to combat such income shifting efforts, designing a multitude of rules to allow current taxation of income from foreign subsidiary activities. This article provides an overview of Subpart F, historically the primary anti-deferral mechanism implemented by the United States, and then details new Internal Revenue Code Section 951A (the aptly termed global intangible low taxed income or "GILTI" provisions), which both builds upon and expands the existing anti-deferral system....
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