Tony Billings and Stephanie Wu accepted for publication in Tax Notes Federal
Mike Ilitch School of Business Professor of Accounting Tony Billings has had an article accepted for publication in Tax Notes Federal, a weekly journal featuring news, commentary and analysis on federal taxation.
The article, “Differences in the Consequences of GILTI and Subpart F Inclusions,” was co-authored by Ilitch School graduate Stephanie Wu (M.S.A. ’21).
This high-level review of the subpart F and GILTI regimes provides a basis for highlighting the intricacies resulting from the coexistence of the provisions. U.S. corporations are faced with mounting challenges in their international operations, especially because of the application of intricate and often overlapping technical provisions. For instance, both subpart F income and GILTI are eligible for high-tax exceptions that allow the income to be excluded from gross income if the effective foreign rate is higher than 90 percent of the maximum U.S. corporate rate. However, the processes for calculating that effective rate are different from those for calculating a CFC’s overall effective rate. For subpart F, each item of income and the attributable foreign tax are calculated to arrive at the effective foreign rate; for GILTI, the tentative tested income item of each tested unit and the attributable foreign tax are calculated to arrive at the effective foreign rate.