INTRODUCTION
The 2017 Tax Cuts and Jobs Act ("T.C.J.A.") introduced
a new anti-abuse tax regime applicable to controlled foreign
corporations ("C.F.C.'s"). The Treasury Department
and the I.R.S. introduced Proposed Treasury Regulations on
September 13, 2018, ("Proposed Regulations") that provide
guidance on calculating global intangible lowtaxed income
("G.I.L.T.I."). For an introduction to the G.I.L.T.I.
regime, see "A New Tax Regime for C.F.C.'s: Who Is
G.I.L.T.I.?" in Insights.
At one level, the G.I.L.T.I. regime is designed to decrease the
incentive for a U.S.- based multinational group to shift corporate
profits to controlled subsidiaries based in low-tax jurisdictions.
This treatment is particularly important because the T.C.J.A. has
modified U.S. tax law to provide a dividends received deduction
("D.R.D.") for dividends received from foreign
subsidiaries. Without G.I.L.T.I., a U.S.-based group could erode
its U.S. tax base by shifting profit-making
