We have updated our YouTube video on GILTI, which we originally discussed here. We had previously believed that GILTI would not apply to a controlled foreign corporation's income that was subject to a foreign tax rate of at least 18.9% (90% of the new U.S. corporate tax rate of 21%). That was incorrect. The foreign tax rate is only relevant to a very narrow exception to GILTI. If a controlled foreign corporation had income that would be Subpart F income, and its U.S. shareholder made the high tax exception election (provided by Code §954(b)(4)), then that income is excluded from GILTI.
We have updated our YouTube video to reflect this change. The new version also points out that the impact of GILTI can be mitigated or even eliminated for individual U.S. shareholders by making a Code §962 election or by having the controlled foreign corporation be owned by a U.S. C corporation.