A QUICK AND EASY GUIDE TO THE NEW FDII, GILTI, AND 100 PERCENT FOREIGN DRD INTERNATIONAL TAX PROVISIONS OF THE 2017 TAX CUTS AND JOBS ACT.

I. INTRODUCTIONThis article addresses the Foreign Derived Intangible Income (1) (FDII) deduction, the Global Intangible Low-Taxed Income (2) (GILTI) inclusion and deduction, and the Dividends Received Deduction (3) (DRD) for [...]
This article describes three new tax provisions included in the 2017 Tax Cuts and Jobs Act: the Foreign Derived Intangible Income (FDII) deduction, the Global Intangible Low-Taxed Income (GILTI) inclusion and deduction, and the Dividends Received Deduction (DRD) for Certain Foreign Dividends. Since these provisions are newly enacted, there are few resources available that provide direction on their appropriate application and calculation methodology.The FDII provision allows domestic corporations to deduct 37.5 percent of their 'foreign derived intangible income' from their taxable income. The GILTI provisions impose a tax on United States shareholders for their pro rata share of such United States shareholder's Controlled Foreign Corporations' income. The GILTI rules also provide a substantial deduction if the United States shareholder is a corporation. Further, a new foreign tax credit is available for GILTI-related foreign taxes for taxpayers who qualify. Finally, the Code now includes a Dividends Received Deduction for dividends received by United States corporations that receive equity investment dividends from specified foreign corporations.This article provides charts and outlines describing the appropriate application of the new FDII, GILT1, and foreign DRD provisions. These charts and outlines were developed by international tax students at Ohio Northern University, Pettit College of Law who have extensively studied these new provisions.