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GILTI and FDII: Structuring Multinational Businesses

GILTI AND FDII: STRUCTURING MULTINATIONAL BUSINESSES

Cost Free
Presentation Length 1.5 hours

Recorded DateFebruary 27, 2024
CPE:Not available
(archived webinars do not offer CPE credits)
Subject AreaTaxes
Course LevelBasic
Course Description

Revisions to the United States Tax Code in 2017 made vast alterations to the tax landscape for multinational businesses controlled by United States taxpayers. The "Global Intangible Low Taxed Income" (GILTI) provisions of §951A expanded anti-deferral efforts by the United States, creating immediate inclusions for most types of income earned by controlled foreign corporations. The blow of this inclusion was softened by the simultaneous creation of §250 which permits a 50% reduction in tax rate for domestic corporate United States shareholders. Non-corporate shareholders are taxed on GILTI at ordinary income rates as high as 37%. Also created by §250 is a 37.5% tax reduction for domestic corporations earning "Foreign Derived Intangible Income" (FDII), making the tax rate on this income 13.125%. However, decisions in how to structure multinational operations are not as simple as comparing these rates.

Join us for a program covering the basics both of GILTI and FDII and how they fit within the United States international tax regime. This webinar will also detail the decision-making considerations surrounding these inclusions, including whether a domestic or foreign incorporation is preferable. This analysis includes assorted factors such as foreign tax credit availability and potential source-country tax reduction for domestic corporations under income tax treaties.

Learning Objectives:


  • Recognize the basics of GILTI and FDII and their role in U.S. international tax

  • Evaluate the decision-making considerations involved in using these exclusions

  • List assorted factors in these inclusions relating to tax credit availability and income tax treaties

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Patrick McCormick is an attorney with over a dozen years of experience, focusing his practice specifically on international taxation. Mr. McCormick represents both business and individual clients on all aspects of United States international tax rules, both from an income tax and estate/gift tax perspective. Having previously served as a partner at a large law firm, a midsized accounting firm, and a boutique tax law firm, Patrick’s client exposures have covered every conceivable area of American-side international tax matters. Patrick has also represented every type of taxpayer – from multibillion-dollar business enterprises and ultra-high net worth individuals to startups and individuals with complex questions but limited budgets.

Mr. McCormick has worked with clients located in over 90 countries on American tax considerations of multinational activities, cultivating specialized knowledge in every area of United States international tax rules. His explicit practice focus has facilitated an unparalleled expertise in the field; Patrick is trusted by clients and advisors around the world to obtain optimal results on international tax matters.

Mr. McCormick is a primary and prolific authority on tax matters. He has spoken on all aspects of international tax to hundreds of thousands of attendees around the globe, functioning as the primary international tax resource for national organizations including CPAacademy.org, Strafford, Lawline, and Leimberg Information Services. Patrick has presented for the American Bar Association, the American Immigration Law Association, and state and local bar associations around the United States. He is a regular contributor to America’s premier tax law publications, including Tax Notes, Journal of Taxation, Tax Notes International, Law360, and Practical Tax Lawyer.

Mr. McCormick published his first treatise on international tax matters, Allocation and Apportionment Rules Under Secs. 861-865, for Thomson Reuters’ Catalyst platform, in October 2021. In late 2021, he also released a 15-hour digital course entirely dedicated to nonresident taxation, United States Tax Considerations for Nonresident Taxpayers. Mr. McCormick has been named a Super Lawyers Rising Star from 2016-2022.
 

About Our Presenter

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McCormick Tax was established in 2022 to serve clients worldwide – no matter their size – on any and all needs in the United States international tax context. Our clients range from multi-billion dollar business enterprises to cost-sensitive startups, high-net-worth individuals to those with lower net worths but discrete (and often complex) international tax needs. Our firm’s founder – a non-accountant international tax attorney - has previously served as a partner (exclusively focused on international tax work) at an AmLaw200 law firm, a boutique tax, trusts and estates law firm, and a tax-focused accounting firm, giving extensive experience both with every aspect of international tax rules and every type of client with international tax needs. Transitioning from a large firm to an independent practice has also enabled our firm’s practitioners to significantly reduce their hourly billable rates – creating efficiencies for our clients and allowing us to work with clients of all sizes.

Our firm covers every aspect of United States international tax, trusts, and estates rules; we also assist our clients on more domestic-oriented United States tax needs. We work directly with clients; we also serve as “outsourced international tax counsel” for accounting, law, and advisory firms around the world. In that role, we assist wherever beneficial with those firms’ client needs in the international tax context, allowing those firms to hang onto clients/continue to work with those clients rather than losing them to firms with internal international tax teams. Our firm’s independent status gives us enormous flexibility in how we structure representations, ensuring we can serve in optimal fashion for whatever client needs arise.