September 02, 2021

Democrats Abroad responds to the Sen Fin Comm International Tax Framework proposals

Democrats Abroad joins fellow activists seeking tax relief for Americans abroad in responding to the Senate Finance Committee's International Tax Framework Discussion Draft.  Click here to download our submission.  Included in our submission is a Briefing Note summarising our August research findings on the experience of American business owners abroad and GILTI Tax.  Click here to download the GILTI Tax and American Businesses Abroad Briefing Note.  The whole of the research is available here.


Congress is currently developing proposals for the 2021 Budget Reconciliation Bill to reform the TCJA international taxation provisions blamed for a nearly 40% decrease in corporate tax revenue.  Americans abroad are making the case to Congress that those reforms should include an exemption from GILTI Tax on the profits of small to medium size businesses owned by Americans abroad with income under $400,000, on the basis that:

  • The GILTI Tax itself and the compliance burdens it creates are putting existential operating and financial pressure on the small to medium size businesses of Americans abroad;
  • By its very nature and in view of the method of calculation, it appears that the GILTI Tax was not meant for the profits of small to medium size businesses;
  • The GILTI Tax relief put in place by the U.S. Treasury last year involves even greater complexity and cost, and is therefore not accessible to those it was meant for; 
  • Most of the businesses impacted by GILTI Tax exist to support ordinary, middle class Americans who are living, working, raising families and retiring abroad; and
  • The GILTI Tax their businesses will face under the proposals for the 2021 Budget Reconciliation Bill will go up, which contravenes ambitions to protect those with income under $400,000 from tax increases.

If you have a business impacted by GILTI Tax we encourage you to reach out to your elected representatives to demand GILTI Tax relief.  The reforms are being drafted RIGHT NOW.  Make your voice and your views heard.

Tax reform will happen when enough Americans abroad reach out to their elected representatives and demand it!