There are some significant effects from the new tax code on future foreign earnings, and these can roughly be split into two parts earnings from foreign subsidiaries.

So for these foreign subsidiaries, there is a minimum tax, which is called global intangible, low taxed income.

They've got a funny little acronym called Guilty.

Now, not all the income is taxed.

Initially it's going to be 50%.

So only 50% of this income will be taxed by 2026.

That's gonna move to 62.5%.

And in addition, there is a deduction based on 10% of the depreciated tax, tax-based assets.

And this is based on tangible assets.

It's depreciation, not amortization.

And the aim of this is really to pick up the returns on intangible assets.

So as a consequence of this, the effective tax rate on foreign derived intangible income is half of 21%, 21% of the new corporate tax rate. Because it's only taxing 50%, it's an effective rate of 10 of 5%.

Bear in mind though, you will get the deduction based on 10% of the depreciated asset base.

Obviously, if there are very few tangible assets, then it's going to be most of the income.

In addition to this, if you have any tax credits, in other words, you've paid tax in the foreign subsidiary in the foreign country, you'll have a tax credit that you'll be able to apply against this of up to 80% of the foreign taxes paid.

So these effective tax rates of 10.5% can be grossed up by the fact that you are not being able to deduct a 100% of the foreign taxes.

The other impact are in foreign direct earnings.

Now, what these are, these are earnings that a corporation in the US is earning from its intangible assets abroad that they own directly.

In other words, they don't own via an international subsidiary, they own them themselves.

And here the minimum tax is based on 62.5% of the foreign income.

And again, that's gonna move up to 78.125% by 2026.

Now, the income earned, this is things like leases, licenses, and services.

These, again, are reduced by a return on any tangible assets.

And the return that was set is 10%.

That's similar to the guilty legislation deduction.

And this means effectively they'll have an effective tax rate of 13.125%.

And what that is, that's the 21% times 62.5%.

And again, because the percentage of the income that you are going to be taxed on moved up to 78%, it will change the effective rate to 16.46% by 2026.

So those are some big changes towards international earnings.

Now, other changes, and this is not an exhaustive list, but it is just worth understanding, there are some deduction limits on top executive Compensation of up to a million dollars.

And there's general tightening up of employee expense deductions.

There were some changes to carried interest, and that was obviously going to be very relevant for private equity and leverage buyouts.

And there are other changes to personal taxes and some specific changes for different industries.

So it's worth just checking with your tax advisors to see if there are any specifics for your particular industry.

And lastly, there's no alternative minimum tax rate, and that was a rate that forced corporations to pay a minimum amount of tax.