GILTI
Also called Global Intangible Low-Taxed Income
A U.S. shareholder-level tax on certain undistributed earnings of controlled foreign corporations.
In full
GILTI taxes U.S. shareholders (10%+) of controlled foreign corporations on a global minimum basis. The mechanism applies to U.S. founders with foreign holding companies and to U.S. corporations with foreign IP-licensing subsidiaries. The 2025 reconciliation act restructured the regime for tax years beginning after 31 December 2025: the inclusion is renamed net CFC tested income, the net deemed tangible income return is repealed, and the deduction percentage that shelters part of the inclusion is reduced from 50% to 40%. Because the deduction percentage, the corporate rate, and any foreign tax credit all bear on the result, the effective rate must be computed for the year and the shareholder in question rather than quoted from a headline figure.
Governed by: GILTI / controlled foreign corporation rules.
This definition is general information about how the term is used in U.S. cross-border tax. It is not advice, and how it applies depends on your own facts and on the treaty, if any, in force with your country.