GILTI / NCTI (US minimum tax on foreign income)
GILTI (Global Intangible Low-Taxed Income) was a US tax introduced by the 2017 TCJA that charged US shareholders of foreign subsidiaries current US tax on income above a routine return on tangible assets, wherever earned. The One Big Beautiful Bill Act, signed in July 2025, renamed it Net CFC Tested Income (NCTI) and changed the maths. From 1 January 2026 the effective NCTI rate is about 12.6% (the 21% federal rate after a 40% deduction). The point of the rule is to stop US groups parking intellectual property offshore for a zero US rate; instead a minimum US charge applies. It is the US version of a controlled-foreign-company minimum tax and overlaps in part with Pillar Two.
ByLoopholeKiln EditorialPublished
Figures current as of·Corrections
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Example: a US group holds its global patents offshore and earns billions in royalties; under NCTI the US taxes a slice of that foreign profit each year at about 12.6%, whether or not the cash comes home.
Why it matters to a small business: this has no bearing on UK, Australian, Canadian or Indian small firms. For a US owner it bites only if you hold more than 10% of a foreign corporation, which is not a typical small-business structure.