The U.S. Treasury and the Internal Revenue Service have issued proposed new regulations on how to calculate global intangible low-taxed income under the Tax Cuts and Jobs Act.

The proposed GILTI regulations address implementation of key provisions of the 2017 tax reform law, which attempts to modernize the U.S. approach to income taxation and shift the focus from a worldwide system to a territorial system, said Treasury Secretary Steven Mnuchin in a statement. “We are providing clarity to taxpayers and closing loopholes that previously allowed for inappropriate international tax planning and shifting profits overseas,” he said.

Under the GILTI provisions of the Tax Cuts and Jobs Act, U.S. taxpayers who own at least 10 percent of the value or voting rights of a controlled foreign corporate are required to include any global intangible low-taxed income in their currently taxable income. GILTI is taxed at 10.5 percent, regardless of whether it is distributed to shareholders.

With the reduced corporate rate from 35 percent to 21 percent, the 10.5 percent tax on GILTI is intended to assure at least a minimum tax even on foreign income. U.S. companies have faced plenty of uncertainy about how GILTI would work, prompting Big 4 firms to try to fill the void with alerts to clients of their own.

The proposed regulations, which are open for public comment before Treasury and the IRS finalize them, indicate consolidated returns will be permitted. The guidance says U.S. shareholders will not compute separate GILTI amounts for each controlled foreign corporation within a year, but instead will compute a single GILTI inclusion amount related to all of its CFCs.

The proposal does not address, however, rules for computing foreign tax credit relating to GILTI. That will be addressed separately in a future release, the IRS says.

Nearly 9 months after the tax reform law passed in late 2017, many companies are still working their way through the details to determine how they are ultimately affected by the new tax regime. The foreign income aspects, such as the transition tax on repatriation of foreign earnings, GILTI, and the base-erosion anti-abuse tax, have proven to be among the more complex issues to sort out, tax experts have said.