Monday, October 4, 2021
Cliff Fleming (BYU; Google Scholar) presents The Decline of Deferral in U.S. International Tax Planning virtually at Vienna University of Economics and Business today:
Prior to the 2017 TCJA, international tax planning by U.S. multinationals concentrated heavily on deferring U.S. residual tax on income earned in low-tax foreign countries and on enhancing the deferral benefit through cross-crediting and aggressive transfer pricing. Post TCJA, deferral planning has been rendered largely vestigial by the Section 245A dividends received deduction, the Section 965 transition tax, and the GILTI regime. Now international tax planning by U.S. multinationals focuses on maximizing the benefit of the low GILTI rate, cross-crediting within the GILTI foreign tax credit basket, minimizing Subpart F income, and shifting income from high-taxed foreign subsidiaries to low-taxed foreign subsidiaries. Aggressive transfer pricing remains an important tool.