Updated Checked by the Tax-Services.ca editorial team How we check
GILTI stands for global intangible low-taxed income, a US tax rule that can make a US shareholder of a foreign corporation report part of that company’s profit on their own US return, even when the company hasn’t paid out a cent. For Canadians it matters in one situation: you’re a US person, and you own 10% or more of a corporation outside the United States.
Does GILTI apply to me if I live in Canada?
Only if two things are true. First, you count as a US person under US tax law (the instructions point to section 957(c) of the US Code for that definition, which we did not read in full). Second, you hold a big enough stake in a foreign company. A Canadian who has never had a US connection can stop reading here.
The IRS instructions for Form 8992 define a US shareholder as a US person who owns, directly, indirectly or by attribution, 10% or more of the voting power or of the value of a foreign corporation. A controlled foreign corporation is one where US shareholders together hold more than 50% of the votes or the value. Your own small Canadian company can end up in that category the moment you’re a US person holding the shares.
Picture Elena, a consultant in Calgary who owns 100% of her own corporation. If she counts as a US person, she’s a US shareholder of a company outside the US, and because she holds all the shares, the company is a controlled foreign corporation too. That’s the textbook situation this rule was written for, even though it feels far from the “global” in the name.
The numbers that define the rule
| Term | Threshold in the IRS instructions |
|---|---|
| US shareholder | A US person holding 10% or more of votes or value |
| Controlled foreign corporation | US shareholders together hold more than 50% of votes or value |
| Form used for the calculation | Form 8992 |
| Instructions we read | Revision of December 2024 |
What does Form 8992 do?
It’s where the inclusion gets worked out. The form takes the tested income and tested losses of each corporation you’re a shareholder of and produces the amount you add to your gross income. The IRS instructions say you file it if you were a US shareholder of at least one foreign corporation at any time during that corporation’s year, and you owned its stock on the last day it was a controlled foreign corporation.
Nothing on that form is a Canadian filing. Your T2 and your T1 follow Canadian rules, and the two systems don’t see each other’s numbers.
The name has changed, and so may the maths
Here’s where we ran into a wall. The section of the US Code behind GILTI, 951A, now carries the heading “Net CFC tested income included in gross income”. That matches what you’ll see in newer commentary. But the Form 8992 instructions we could read are the December 2024 ones, and they still use the GILTI wording. They say nothing about a 2025 law or about tax years starting in 2026.
So we won’t quote a deduction percentage or an effective rate. We couldn’t confirm the current figures on an IRS page, and a wrong rate on a page like this does damage. Check the current Form 8992 instructions on the IRS site before you plan around any figure you see elsewhere.
What to look at on the Canadian side
A Canadian company has its own tax bill, and that part you can estimate. The corporate tax calculator gives a 2026 estimate by province. If you take money out as a dividend, the dividend tax calculator shows the personal tax on it. And the income tax calculator covers your salary or other income.
Be careful with one thing. These tools model Canadian tax only. They don’t know about a US inclusion, a foreign tax credit or any relief between the two countries. If you’re a US person with a Canadian company, the combined bill needs someone who files both kinds of returns, and that person should be a cross-border specialist, not a general tax preparer.
What should you do if you think it applies to you?
Don’t panic, and don’t ignore it either. Start by writing down three facts: whether you might be a US person, what percentage of the company’s votes and value you hold (counting indirect holdings and family where relevant), and who else owns shares. Those three facts decide whether the rule is even in play.
Then book time with a cross-border tax professional, not a general preparer, and bring last year’s corporate return and your shareholder records. Ask them straight out: do I have a Form 8992 filing, and what’s the current rule for my tax year? A long chat now costs a few bucks. A missed form can cost far more.
Mistakes people make with GILTI
Assuming it’s about intangibles is the first. The name suggests patents and brands, but the instructions define the calculation through tested income of controlled foreign corporations, so read the definition before you decide it does not touch you.
Missing the form is the second. Form 8992 belongs to the shareholder, and no Canadian slip prompts you to file it.
The third is treating “no dividend paid” as “no US income”. The inclusion is a deemed amount, so cash never has to move.
Sources, and how we checked them
The definitions come from the Internal Revenue Service’s Instructions for Form 8992 (revised December 2024) and from the heading of section 951A of the US Code. The 2026 Canadian corporate estimates come from our own data files, and the Ontario small-business rate for 2026 is a blend we derived, not a published figure. This website has no connection with the IRS, the CRA or any other government body.
Frequently asked questions
What does GILTI stand for?
Global intangible low-taxed income. It's the amount a US shareholder of a foreign corporation adds to gross income under section 951A.
Who is a US shareholder?
A US person who owns 10% or more of the votes or value of a foreign corporation, counting indirect and constructive holdings.
When is a foreign company a controlled foreign corporation?
When US shareholders together hold more than 50% of its votes or value.
Which form calculates it?
Form 8992, filed by the US shareholder.
What is the current GILTI rate?
We couldn't confirm it on an IRS page, so we give none. Check the current Form 8992 instructions.
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