GILTI (Global Intangible Low-Taxed Income)

A US anti-deferral tax introduced by the 2017 Tax Cuts and Jobs Act that applies to US shareholders of Controlled Foreign Corporations (CFCs). GILTI forces current-year US taxation on foreign earnings that exceed a 10% deemed return on tangible assets, preventing US persons from permanently deferring low-taxed foreign profits. Individual shareholders face the full 37% top rate unless they make a §962 election to be taxed as a corporation (21% rate) and claim foreign tax credits. GILTI is the reason US citizen owners of foreign operating companies face significantly heavier tax burdens than non-US owners of the same entity.