GILTI (Global Intangible Low-Taxed Income)
GILTI (Global Intangible Low-Taxed Income) is a U.S. tax regime enacted by the 2017 Tax Cuts and Jobs Act that requires U.S. shareholders (≥10% ownership) of a Controlled Foreign Corporation (CFC) to include the CFC's "low-taxed" foreign earnings in
GILTI (Global Intangible Low-Taxed Income) is a U.S. tax regime enacted by the 2017 Tax Cuts and Jobs Act that requires U.S. shareholders (≥10% ownership) of a Controlled Foreign Corporation (CFC) to include the CFC's "low-taxed" foreign earnings in their U.S. taxable income annually — whether or not those earnings are distributed.
Plain-English example
A U.S.-citizen founder owns 60% of an Indian private limited company. The company earns ₹2 crore profit, pays Indian corporate tax at ~25%, and retains the rest. Without GILTI, the U.S. owner would defer U.S. tax until dividend. Under GILTI, a portion of those retained earnings is taxed in the U.S. this year on Form 8992, often offset partially by foreign-tax credits under the India-U.S. DTAA.
When it applies
- U.S. citizens / green-card holders owning ≥10% of a non-U.S. company
- NRI returning to U.S. who still holds an Indian Pvt. Ltd. / LLP
- U.S.-resident promoters of Indian start-ups
SEBI / regulatory caveat
GILTI is purely a U.S. IRS rule; SEBI and Indian Income Tax have no equivalent. Section 962 election or high-tax exclusion may reduce the bite. Always engage a U.S.-India dual-qualified tax advisor — this page is education, not advice.