In an effort to combat possible indefinite deferral of U.S. taxation with respect to active foreign business income, the 2017 tax act (Pub. L. No. 115-97) enacted §951A, which requires each U.S. shareholder of a controlled foreign corporation (CFC) to include its “global intangible low-taxed income” (GILTI) for the taxable year in gross income.

In response to concern about the new GILTI provision potentially harming the competitive business position of domestic corporations, and to offset the role that tax considerations play when domestic corporations choose where to earn intangible income attributable to foreign-market activity and encourage U.S. export activities, the 2017 tax act also enacted §250, which generally permits domestic corporations to deduct 37.5% of their “foreign-derived intangible income” (FDII) and 50% of their GILTI in taxable years beginning before 2026.