Levy Salis LLP is pleased to share this timely update on U.S. international tax reform, written by cross-border tax expert Kevyn Nightingale, LLM, CPA, CA (ON), CPA (IL), TEP.
In his latest article, Kevyn examines the end (in name only) of the Global Intangible Low-taxed Income (GILTI) regime. While the recently passed One Big Beautiful Bill Act (OBBBA) eliminates the GILTI label, it replaces it with new terminology—Net CFC Tested Income (NCTI)—and tighter rules that may increase tax exposure for U.S. shareholders of foreign corporations, including many Americans living in Canada.
The article offers a practical breakdown of what these changes mean, how they impact Canadians with U.S. tax obligations, and why compliance remains as costly and complex as ever.
The content below is just an excerpt. For full insights and to ensure compliance with the latest regulations, download the complete report by clicking the link below.
Kevyn Nightingale, LLM, CPA, CA (ON), CPA (IL), TEP
Wolters Kluwer
July 15, 2025
NO MORE GILTI (WELL, SORT OF)
How did you feel about the United States calling a foreign tax provision “GILTI” (Global Intangible Low-taxed Income)?2 I always thought it was more than a little cheeky when some congressional staffer snuck in this tidbit during the late hours of tax reform, just before Christmas 2017.
The One Big Beautiful Bill Act (OBBBA)3 contains legislation to modify international tax of provisions affecting US shareholders of foreign corporations. One piece of good news in the OBBBA is that GILTI will soon be gone. The bad news is that it pretty much just got a new name: Net CFC Tested Income (“NCTI”? “NCFCTI?” Doesn’t quite roll off the tongue, does it?). More importantly, the substance of the rule is not only retained, but International made stricter.
Foreign Corporations
A US citizen is subject to taxation on worldwide income no matter where they live. The United States has controlled foreign corporation (“CFC”) rules which are designed to do a number of things. The principal objective is capital export neutrality: “Mobile” income of a US person should be taxed substantially the same way wherever invested. Mobile income refers to types that can easily be moved outside the United States. Primarily, this category consists of investment income (interest, dividends, rents, royalties, and capital gains), but there are other elements. The idea behind these rules is that an American incorporating a company in a low-tax jurisdiction and having it earn income would not pay dramatically different tax than by investing directly. The United States has “Subpart F”4 and “Foreign Personal Holding Company Income”5 rules which largely accomplish this goal. These rules don’t make a lot of sense in the context of a Canadian-resident US citizen using a Canadian corporation (because Canada is foreign to the United States), but such are the vagaries of tax legislation.
For full insights and to ensure compliance with the latest regulations, download the complete report by clicking the link below.
The comments offered in this article are meant to be general in nature and are not intended to provide legal advice regarding any individual situation. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate for your circumstances.
About the author
With more than 30 years of combined experience, we are proud at Levy Salis LLP to provide our clients with tailored services to meet their Canadian, US and Israeli tax and estate planning, US real estate, Quebec real estate and US immigration needs.
Kevyn is a cross-border tax practitioner with over 35 years’ experience focusing on the intersection between individuals and entities with international tax issues.
His work spans the practical and the academic. He speaks and writes on Canadian and US tax issues, most regularly for Wolters Kluwer (CCH), the Society for Trust and Estate Practitioners and the Canadian Tax Foundation. He has published over 100 papers, including three in major journals that were peer-reviewed.
