22. Department of the Treasury · Notable · Needs Congress
Cut the GILTI tax rate to no higher than 12.5 percent
Printed page 697 22. Department of the Treasury
“The tax on global intangible low-taxed income should be reduced to no higher than 12.5 percent, with the 20 percent haircut on related foreign tax credits reduced or eliminated.”
What has happened
- Partially done
One of the two objects in this Quote was delivered and the other moved the wrong way. Section 70312 of Public Law 119-21 cut the haircut on foreign tax credits for tested income from 20 percent to 10 percent by striking "80 percent" and inserting "90 percent" in section 960(d)(1) — the reduction the Quote asks for. But section 70321 cut the section 250 deduction from 50 percent to 40 percent, which raises the effective rate on what is now called net CFC tested income from 10.5 percent to about 12.6 percent, above the 12.5 percent ceiling asked for; and section 70323 repealed the deemed tangible return that had excluded a share of foreign income from the tax altogether.
Research log
What was searched, and what didn’t count as evidence
Research notes
Leveled partial under playbook §3b’s two-object rule: the foreign tax credit haircut was reduced as asked, the rate was not reduced to 12.5 percent. Section 70312(b) also adds a new 10 percent disallowance on foreign taxes attributable to distributions of previously taxed net CFC tested income, which claws back part of the haircut relief.
Section 70323 renamed “global intangible low-taxed income” to “net CFC tested income” throughout the Code, so a keyword search for GILTI in post-2025 documents will miss the provision.
- Action
- restrict
- Object
- tax on global intangible low-taxed income (GILTI)
- ID
- 1933