Under the Tax Cuts and Jobs Act of 2017 (the “Act”), American citizens and green-card holders (“U.S. Persons”) living abroad are personally subject to the repatriation tax and Global Intangible Low-Taxed Income ("GILTI") taxes if they constitute individual U.S. Shareholders of a Controlled Foreign Corporation (“CFC”).
The effective tax rate of the repatriation tax is 17.45% on individual U.S. Shareholders –- higher than the 15.5% rate that multinationals pay. Large corporations receive tax credits and deductions to minimize their GILTI income, individual U.S. Shareholders do not, and will pay taxes at the rate of 37% on GILTI income.
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