Form 5471 Schedule I-1 GILTI High Tax Exception
ONESOURCE Income Tax International calculates the GILTI High Tax Exception (HTE) provided you have selected the
GILTI High Tax Exception
option in the Top Consolidation binder’s FTC Defaults
screen. For foreign divisional consolidations with the Intercompany Transaction Level set to Division, the system refers to the Binder Properties > International Tab > Tested Unit for GILTI High Tax Exception
option of each member division to determine if the member should be treated as an individual Tested Unit for the calculation (selected) or if the member should be aggregated with others into the divisional consolidation’s results (not selected). During Subpart F calculations, “Tested Unit Country Groups” will be built by combining individual Tested Unit members with the same Country of Operations. The amounts computed for the GILTI Tested Item Sourcing and Translation Import Report are then adjusted as noted above if the GILTI HTE effective tax rate exceeds the 18.9% threshold.A new tab,
High Tax Exception Adjustments
, is available in the GILTI Workpaper. Amounts entered in this screen will adjust the passive and general basket values from the Subpart F calculation as follows:- Disregarded Payments modifies Gross Income
- Other Deductions Adjustment modifies Other Deductions
- Interest Expense Adjustment modifies Interest Expense
- Foreign Income Taxes Adjustment (FC) modifies Foreign Income Taxes Paid
- Foreign Income Taxes Adjustment (US$) modifies Foreign Income Taxes Paid (U.S. Dollar)
GILTI Workpaper – High Tax Exception Adjustments
In a foreign subsidiary, parent, corporate single entity or divisional consolidation with the
Intercompany Transaction Level
set to Divisional Consolidation
, the Entity
dropdown lists the current binder only. However, in a divisional consolidation with the Intercompany Transaction Level
set to Division
, you may select any of the division members of the consolidation. You can enter both positive and negative amounts in the fields. The translation rate defaults to the functional currency to U.S. Dollar weighted average rate for the binder but can be overridden with a positive value between 0.0000001 and 9999.9999999.note
While all divisions with a binder in the tax year will be listed in the
Entity
dropdown, the system only includes the members of the current divisional consolidation in the GILTI HTE calculation. The system ignores entries for divisions that are not related to the current divisional consolidation.
