Tax Implications of President Biden’s Proposed American Jobs Plan and American Families Plan

On May 28, 2021, President Biden released his fiscal year 2022 budget blueprint (the “Budget”) that includes many of his proposed tax proposals, included in the American Jobs Plan and American Families Plan. The Budget generally proposes to increase corporate tax rates and to overhaul both international tax law and energy sector tax incentives. The Treasury Department’s summary of these tax proposals is referred to as the “Green Book.”

This Client Alert discusses the key corporate, international, and energy-related tax provisions of the Budget for various taxpayers. All Section references refer to the Internal Revenue Code of 1986, as amended (the “Code”). Unless otherwise specified, the effective date for each proposed provision is the tax year beginning after December 31, 2021.

Corporate Taxpayers: The key business tax aspects of the Budget are summarized below.

• Raise the Corporate Income Tax Rate to 28%: The Budget would increase the corporate income tax rate from 21% to 28% and would be effective for tax years beginning after December 31, 2021. For fiscal year taxpayers, the Budget would apply a tax rate of 21% to the months in the fiscal year that fell in 2021 and a tax rate of 28% for the months in the fiscal year that fall in 2022.
• Impose a 15% Minimum Tax on Book Earnings of Large Corporations: The Budget would impose this 15% tax on corporations with worldwide book income in excess of $2 billion. The Green Book highlights that this would apply to approximately 120 companies that report pre-tax net book income over $2 billion. This proposal would be effective for tax years beginning after December 31, 2021.
• Reform the Global Minimum Tax Regime. As part of the overall amendment to the minimum tax on the global intangible low-taxed income (“GILTI”), the Budget proposes to (1) eliminate the 10% qualified business asset income (“QBAI”) exemption, (2) reduce the Section 250 deduction, which reduces the US income tax on GILTI inclusion amounts, from 50% to 2%, which generally should increase the US effective tax rate to 21% in conjunction with the proposed corporate income tax rate increase to 28%, and (3) require a “jurisdiction-by-jurisdiction” calculation to replace the current “global averaging” calculation for purposes of the global minimum tax, which has allowed income earned in higher-taxed jurisdictions to reduce the residual US tax paid on income earned in lower-taxed foreign jurisdictions. Additionally, the Budget proposes repealing the high-tax exemption for both subpart F and GILTI.
• Disallow Deductions Attributable to Income that is Exempt from US Tax (or Taxed at Preferential Rates): The Budget proposes to expand Section 265 to disallow deductions allocable to certain foreign gross income that is exempt from tax or taxed at a preferential rate through a deduction (e.g., application of a GILTI Section 250 deduction or a dividend eligible for a Section 245A deduction). The Budget also proposes to repeal Section 904(b)(4), regarding the impact of the Section 245A deduction for dividends on the limitation of the credit for foreign taxes.
• Further Limit Expatriation by Domestic Corporations: For transactions completed after the date of enactment, the Budget proposes to broaden the scope of the complex Section 7874 anti-inversion regime, applicable to certain transactions in which a US corporation is acquired by a foreign corporation, in several ways.
  • First, the Budget proposes to broaden the definition of an inversion transaction by replacing the 80% test, which generally treats the foreign acquiring corporation as a US corporation for all US income tax purposes if the former shareholders of the US corporation own 80% or more (by vote or value) of the foreign corporation, with a greater than 50% test and eliminating the 60% test (which imposes full US tax on the foreign corporation with respect to income or gain recognized by the US corporation and affiliates in connection with the inversion or in the 10-year period after the completion of the inversion, if the continuing former shareholder ownership is at least 60% but less than 80% (by vote or value).
  • Second, the Budget proposes to expand the regime such that an inversion transaction occurs regardless of the shareholder continuity level if (1) immediately prior to the acquisition, the fair market value of the domestic entity is greater than the fair market value of the foreign acquiring corporation, (2) after the acquisition, the expanded affiliated group is primarily managed and controlled in the United States, and (3) the expanded affiliated group does not conduct substantial business activities in the country in which the foreign acquiring corporation is created or organized.
  • Third, the Budget proposes to expand the definition of an “acquisition” for purposes of Section 7874, to capture more asset acquisitions (including a direct or indirect acquisition of substantially all of the assets constituting a trade or business of a domestic corporation, substantially all of the assets of a domestic partnership, or substantially all of the US trade or business assets of a foreign partnership), as well as a distribution of stock of a foreign corporation by a domestic corporation (or a partnership) that represents either substantially all of the assets or substantially all of the assets constituting a trade or business of the distributing corporation (or partnership), which would be treated as a direct or indirect acquisition of substantially all of the assets or trade or business assets, respectively, of the distributing corporation (or partnership).
• Foreign Fossil Fuel Income Reform: The Budget proposes to both (1) eliminate the GILTI exemption for foreign oil and gas extraction income (“FOGEI”) and (2) expand the definition of FOGEI and foreign oil related income (“FORI”) for GILTI purposes and subpart F purposes to include income derived from shale oil and tar sands activity. Currently, a US corporation receiving a dividend from a controlled foreign corporation may be eligible for a Section 245A deduction when FOGEI is repatriated, and FORI may be eligible for a Section 250 deduction under the GILTI rules, resulting in disparate and preferential treatment compared to FOGEI and FORI earned through a foreign branch.
• Repeal the FDII Deduction: The Budget proposes to repeal the deduction for US corporations for Foreign-Derived Intangible Income (“FDII”). Currently, US corporations may deduct 37.5% of FDII (reduced to 21.875% for taxable years beginning after December 31, 2025), where FDII is a formulaic calculation of deemed intangible income attributable to foreign exports.
• Replace BEAT with SHIELD: For tax years beginning after December 31, 2022, the Budget proposes to eliminate the Section 59A Base Erosion and Anti-Abuse Tax (“BEAT”), enacted as part of the TCJA, and replace it with the Stopping Harmful Inversions and Ending Low-Tax Developments (“SHIELD”).

BEAT is generally imposed on corporate taxpayers with substantial gross receipts that make substantial payments to foreign related parties above a specified threshold. 

SHIELD operates to disallow deductions for a domestic corporation or branch, by reference to payments made (or deemed made) to “low-taxed members” in a multinational group that prepares consolidated financial statements (referred to as the “financial reporting group”). A “low-taxed member” is a member whose income is subject to an effective tax rate below a designated minimum tax rate (the OECD’s agreed-upon Pillar Two rate or the US rate of 21% if SHIELD is in effect before a Pillar Two agreement has been reached).¹ Payments may be fully disallowed or partially disallowed, depending on type of payment.

SHIELD applies to financial reporting groups with global annual revenues in excess of $500 million. The Budget proposes to give the Secretary the authority to exempt financial institutions, partnership payments, and certain financial reporting groups that, on a jurisdiction-by-jurisdiction basis, meet a minimum effective level of taxation.

• Limit FTCs on Hybrid Entities: For transactions occurring after the date of enactment, the Budget proposes to amend the foreign tax credit regime to apply Section 338(h)(16) principles such that the source and character (but not amount) of any item resulting from the disposition of the interest in a specified hybrid entity, or change in entity classification, is determined based on the source and character of an item of gain or loss which the seller would have taken into account upon the sale or exchange of stock.
• Restrict Deductions on Foreign Interest: For multinational groups that prepare consolidated financial statements (referred to as a “financial reporting group”), the Budget proposes a limitation on the deductibility of interest expense if a financial reporting group member has net interest expense for US tax purposes but the member’s net interest expense for financial reporting purposes exceeds its proportionate share of the financial reporting group’s net interest expense (referred to as “excess financial statement net interest expense”). Any disallowed interest expense may be carried forward indefinitely. To the extent a member is also subject to limitations under Section 163(j), the lower limitation prevails.
  • Proportionate Share Approach. The interest expense deduction will be denied for a member’s excess net interest expense—calculated as a member’s net interest expense for US tax purposes multiplied by the ratio of the member’s excess financial reporting net interest expense to the member’s financial reporting net interest expense.
  • 10% Alternative Approach. Alternatively, a member may elect to calculate its deduction limitation as its interest income plus 10% of the member’s adjusted taxable income (as defined under Section 163(j)).

• Provide Tax Incentives for Locating Jobs and Business Activity in the United States and Remove Tax Deductions for Shipping Jobs Overseas: The Budget would create a new business tax credit that would be equal to 10% of eligible expenses in connection with onshoring a business. For this tax credit, onshoring a business would mean reducing or eliminating a business currently conducted outside the United States and starting up, expanding or otherwise moving the same trade or business to a location within the United States, to the extent that this action results in an increase in US jobs. The Budget would also reduce tax benefits associated with a United States company moving jobs outside of the country by disallowing deductions for expenses incurred in connection with offshoring a US business.

Individuals: The key individual tax aspects of the Budget are summarized below.

• Increase the Top Marginal Income Tax Rate for High Earners: The Budget would increase the top individual marginal income tax rate from its current rate of 37% to 39.6%. This increased tax rate would apply to married taxpayers filing a joint return with income over $509,300 and to individuals with income over $452,700.
• Reform the Taxation of Capital Income: For taxpayers with an AGI over $1M, the Budget would increase the tax rate on long-term capital gains and qualified dividends to match the ordinary income tax rates of those taxpayers. This proposal would be effective for any gain recognized after April 28, 2021, which was the date when President Biden announced his proposal to increase capital gain rates.
• Treat Transfers of Appreciated Property Upon Death or by Gift with Unrealized Capital Gains Appreciation in Excess of $1 million as Realization Events: The Budget would treat a transfer of an appreciated asset as an income tax realization event, either at death or by gift during life. The taxable gain, which would be based on the difference between the donor’s basis on the date of death or gift and its fair market value at the time of transfer, would be reported on the estate or gift tax return. In comparison, currently, neither a gift during life nor a transfer at death is a realization event.
• Repeal Deferral of Gain from Like-Kind Exchanges: The Budget would limit the amount of gain that could be deferred by a taxpayer to $500,000 per individual. Any gain realized on a like-kind exchanges that exceed the $500,000 limitation would be recognized in the tax year in which the property was transferred. This proposal would be effective for an exchange that is completed in tax years beginning after December 31, 2021.
• Rationalize Net Investment Income (NIIT) and Self-Employment Contributions Act (SECA) Taxes: The Budget would change the way the NIIT and SECA taxes apply to individual taxpayers with AGI’s that exceed $400,000, specifically by applying the taxes to active pass-through business income. Under the current tax law, individuals with AGI above $200,000 ($250,000 for joint-return taxpayers) are subject to a 3.8% NIIT. However, the NIIT currently does not apply to self-employment earnings, which are subject to either SECA tax or FICA tax on earnings up to an indexed maximum. This income is also subject to a 2.9% Medicare tax and an additional 0.9% Medicare tax. The Budget would subject all active business income for high-income taxpayers to the 3.8% Medicare tax through either the NIIT or SECA tax. This would include expanding the definition of Net Investment Income to include income from any trade or business that is not otherwise subject to employment taxes.
• New Treatment of Limited Partners, LLC Members & S Corporation Shareholders: The Budget would expand the imposition of SECA taxes on a Limited Partner of a Partnership by imposing the distributive share of materially participating high-income Limited Partners to SECA tax. Similarly, the income from materially participating LLC Members and S Corporation Shareholders would be subject to this increased tax. Taxpayers would be subject to this if they materially participated in a business in which they are direct and indirect owners. Taxpayers would be considered to participate materially in a business if they are involved in it in a regular, continuous, and substantial way.

Financial Institutions: The key tax aspects of the Budget that are relevant for financial institutions are summarized below:

• Expand the 1099 Information Reporting Requirement: The Budget would create a comprehensive information reporting regime for financial accounts. This new compliance initiative would require financial institutions to report additional information on an annual Form 1099 information return. Specifically, this 1099 form would report gross inflows and outflows from a financial account with a breakdown for physical cash, transactions with a foreign account, and transfers to and from another account owned by the taxpayer. The threshold to determine whether this information would need to be reported would be $600 in gross inflows and outflows. This provision would be effective for tax years beginning after December 31, 2022.

Energy-Related Provisions: In general, the Budget proposes replacing many of the current tax credits and incentives that benefit the oil and gas industry with new and enhanced tax credits and other benefits to incentivize clean energy production, low emission vehicles, and energy efficient buildings. The key tax aspects of the Budget for prioritizing clean energy are summarized below.

• Tax Credits to Incentivize Clean Energy Production and Low-Emission Vehicles: This summary will first discuss the existing tax credits that the Budget proposes to modify and will then discuss the proposed new incentives.

Proposed Changes to Existing Credits:

• Enhanced PTC and ITC: The Budget proposes extending the full Section 45 production tax credit (“PTC”) for qualified facilities. “Qualified facilities” include facilities for the production of electricity from energy resources including wind, open-loop biomass, closed-loop biomass, municipal solid waste, geothermal, hydropower, and marine and hydrokinetic energy. A taxpayer may generally claim the PTC for a 10-year period beginning on the date the facility is placed in service. Under current law, the PTC is set to expire for facilities where construction begins after 2021. The Budget would extend the PTC for facilities for which construction begins after December 31, 2021 and before January 1, 2027.

Similarly, the Budget proposes extending the Section 48 renewable energy investment tax credit (“ITC”). The ITC applies to investments in solar and geothermal electric energy property, qualified fuel cell power plants, geothermal heat pumps, small wind property, offshore wind property, waste energy recovery property, and combined heat and power property. Under current law, the ITC is 30% for property that began construction before January 1, 2020, and the applicable rate gradually phases out through 2024. The Budget would expand the ITC to include stand-alone energy storage technology that stores energy for conversion to electricity and has a capacity of not less than five-kilowatt hours. In addition, the Budget would restore the ITC to the full 30% rate for eligible property that begins construction after December 31, 2021 and before January 1, 2027.

For each of the PTC and the ITC, a taxpayer would have the option to elect a direct cash payment in lieu of the credit. The Budget plans to pair these credits with strong labor standards.

Beginning in 2027, the credit rate for the PTC and the ITC would phase out over a five-year period. The credit would be reduced by 20% in each year and would be completely phased out beginning in 2031 (and in the case of the PTC, for facilities where construction begins after December 31, 2030). 

• Carbon oxide sequestration credit under Section 45Q: The Budget proposes expanding the carbon oxide sequestration credit under Section 45Q. Under current law, a tax credit is available for the capture and sequestration of qualified carbon oxide using carbon capture equipment placed in service at a qualified facility on or after February 9, 2018. A facility is a qualified facility if, among other things, it begins construction by January 1, 2026. The amount of the credit depends on when and how the carbon oxide is sequestered. The Budget would extend the construction date for qualified facilities such that they must begin construction before January 1, 2031. The Budget also would provide two enhanced credits—an enhanced credit for carbon oxide for certain hard-to-abate sectors (e.g., cement production, steelmaking, hydrogen production, and petroleum refining) and an enhanced credit for direct air capture projects. For hard-to-abate sectors, an additional $35 credit per metric ton of qualified carbon oxide would be available. In 2026, the total per ton credit for these projects would increase to $85 per metric ton. For direct air capture projects for qualified carbon oxide that is disposed of in secure geological storage, an additional $70 credit per metric ton of qualified carbon oxide would be available. The total per ton credit for direct air capture credits with secure geological storage would increase to $120 in 2026. A taxpayer would have the option to elect a direct cash payment in lieu of the credit. The Budget plans to pair these credits with strong labor standards.
• Qualifying advanced energy product credit under Section 48C: The Budget proposes expanding the advanced energy manufacturing credit under Section 48C. Under current law, the Section 48C credit is equal to 30% of the eligible investment in qualifying advanced energy projects (a “qualifying project”). A qualifying project is one that reequips, expands, or establishes a manufacturing facility for the production of (1) solar, wind, geothermal, or other renewable energy equipment, (2) electric grids and storage for renewables, (3) fuel cells and microturbines, (4) energy storage systems for electric or hybrid vehicles, (5) carbon dioxide capture and sequestration equipment, (6) equipment for refining or blending renewable fuels, (7) equipment for energy conservation, and (7) other advanced energy property designed to reduce greenhouse gas emissions as determined by the Department of the Treasury. The Department of the Treasury consults with the Department of Energy to award selectively Section 48C credits to applicants based on certain criteria. The Budget proposes to expand the scope of qualifying projects for purposes of the credit. In particular, a qualifying project would include industrial facilities (rather than just manufacturing facilities) and recycling of an eligible technology (in addition to production of the technology). The Budget also would expand the list of eligible technologies to include energy storage and components, electric grid modernization equipment, carbon oxide sequestration, and energy conservation technologies. The selection criteria for awarding Section 48C credits would be expanded to include evaluating wages for laborers and whether projects create jobs in communities impacted by the closure of coal mines or coal power plants. The Budget would authorize an additional $10 billion for awards of Section 48C credits, with $5 billion specifically allocated to projects in coal communities. There would be a three-year period for applications for the Section 48C credits, beginning December 31, 2021. An applicant would have the option to elect a direct payment in lieu of the credit.
• Electric vehicle charging station credit under Section 30C: The Budget proposes expanding and enhancing the tax credit for electric vehicle charging stations. Under current law, Section 30C allows an investment tax credit equal to 30% of the cost of alternative fuel vehicle refueling property, which includes electric vehicle charging stations and hydrogen refueling stations. The credit applies on a per-location basis, not on a per device basis and is capped at $1,000 when such property is installed at a residence and at $30,000 when it is installed for commercial use. The credit is set to expire on December 31, 2021. The Budget would allow taxpayers to claim the tax credit on a per-device basis and extend the tax credit through December 31, 2026. The cap on tax credits for commercial use devices would increase to $200,000. A taxpayer would have the option to elect a cash payment in lieu of the credit. The Budget plans to pair these credits with strong labor standards.

Proposed New Tax Credits

• New investment tax credit for electricity transmission investments: The Budget proposes a credit for a taxpayer’s investment in “qualifying electric power transmission property” that delivers electricity from the location where electricity is generated to the location where it is used. Qualifying property would include overhead, submarine, and underground transmission facilities meeting certain criteria, as well as ancillary facilities and equipment necessary for the proper operation of such facilities. The credit would be equal to 30% of a taxpayer’s investment in qualifying property placed in service in a given tax year. A taxpayer would have the option to elect a cash payment in lieu of the credit. The Budget plans to pair these credits with strong labor standards. If enacted, this credit would be effective for property placed in service after December 31, 2021 and before January 1, 2032.
• New allocated production tax credit for electricity generation from eligible existing nuclear power facilities: The Budget proposes a credit for generating electricity from existing nuclear power facilities. Under current law, Section 45J provides an allocated production tax credit for the first eight years of operation of new advanced nuclear power facilities. There is currently no similar tax credit for existing facilities, even though existing facilities contribute a large portion of US electricity generation that does not produce greenhouse gas emissions. The proposed credit would aim to maximize the preservation of existing nuclear electricity generation. The Budget would establish a new allocated production credit for electricity generated from eligible existing nuclear power facilities that bid for the credits. Eligibility to bid for these credits would depend, among other things, on the ability to demonstrate that the facility has a good operation and safety record, the facility is facing financial operating losses (taking into account future projections), and ceasing operations would cause emissions of various air pollutants to increase. Facilities would bid to receive credits over two-year windows. Each bid would identify the minimum credit amount per megawatt-hour of generation to maintain operations during the two-year window. Up to $1 billion in nuclear production tax credits would be available for allocation in each year. The first two-year crediting window would begin on January 1, 2022, and the last crediting window would begin on January 1, 2030. A taxpayer would have the option to elect a cash payment in lieu of the credit. The Budget plans to pair these credits with strong labor standards.
• New tax credit for medium- and heavy-duty zero-emissions vehicles: The Budget proposes a business tax credit for new medium- and heavy-duty zero emission vehicles, including battery electric vehicles and fuel cell electric vehicles. Under current law, Section 30D provides taxpayers with a credit for qualified plug-in electric drive motor vehicles. However, this credit does not extend to medium- and heavy-duty vehicles. The Code previously had a tax credit for heavy-duty hybrids, but it expired in 2009. The Budget views the new credit as important to promote consumer choice and adoption of zero-emission vehicles. The proposed business tax credit would allow vehicle manufacturers to submit eligible vehicles to the IRS. For each vehicle class, the tax credit would be a set amount per vehicle, with the amount phased down over a five-year period beginning in 2022—the applicable amount would depend on the year of purchase. To qualify for the credit, the taxpayer must acquire the vehicle for use or lease by the taxpayer (rather than for resale), the original use of the vehicle must commence with the taxpayer, and the taxpayer must predominantly use the vehicle in the United States. Taxpayers would have the option to elect a cash payment in lieu of the credit. The Budget plans to pair these credits with strong labor standards.
• New tax credit for sustainable aviation fuel: The Budget proposes a production tax credit for sustainable aviation fuel. Under current law, sustainable aviation fuel is eligible for the biodiesel tax credit. Otherwise, the Code currently does not contain a tax credit for such aviation fuel production. The proposed tax credit would be equal to $1.50 per gallon for sustainable aviation fuel that achieves at least a 50% reduction in emissions relative to conventional jet fuel. The credit would apply for fuel produced after December 31, 2021 and before January 1, 2028. In addition, a supplementary credit of up to 25 cents per gallon would be available on a sliding scale depending on the emissions reduction relative to conventional jet fuel. The Budget plans to pair these credits with strong labor standards.
• New tax credit for low-carbon hydrogen production: The Budget proposes a low-carbon hydrogen production tax credit. The Code previously included a 30% credit for the cost of qualified alternative fuel vehicle refueling property, including fuel at least 85% of the volume of which consists of hydrogen. There is not a similar tax credit under current law. The proposed tax credit would apply to each kilogram of qualified low-carbon hydrogen produced by the taxpayer for an end use application in the energy, industrial, chemicals, or transportation sector from a qualified production facility. The credit would apply during a six-year period beginning on the date the facility was placed in service. For a facility to be eligible, construction of the facility must begin before the end of 2026. Taxpayers would have the option to elect a cash payment in lieu of the credit. The Budget plans to pair these credits with strong labor standards.
• Tax Benefits to Incentivize Energy Efficient Projects
• Modify existing Section 45L credit for energy-efficient homes: The Budget proposes increasing the Section 45L tax credit for the construction of a new energy-efficient home from $2,000 to $2,500 per dwelling unit and extending the credit for five years to December 31, 2026. The proposal would also expand the dwelling units eligible for the credit.
• Modify existing Section 179D energy-efficient commercial buildings deduction: The Budget would increase the maximum Section 179D deduction for energy efficient commercial building property placed in service during a taxable year. Under current law, the maximum allowable deduction is $1.80 per square foot. A partial deduction of 60 cents per square foot is available for a building that does not achieve at least 50% energy savings but that meets certain energy-savings targets. The Budget would increase the maximum deduction to $3 for qualifying property placed in service after December 31, 2021. The partial deduction rate would increase to $1 per square foot. In addition, the required efficiency standard for a full deduction would decrease to 30%.
• New mechanical insulation labor costs credit: The Budget proposes a new general business tax credit for qualifying mechanical insulation labor costs. There is no similar tax credit under current law. The proposed credit would be equal to 10% of such costs paid or incurred by the taxpayer during such taxable year. Mechanical insulation labor costs would include the labor cost of installing mechanical insulation property, including insulation materials, as well as facings and accessory products, for a depreciable mechanical system that is placed in service in the United States and that satisfies certain energy loss reductions. The credit would be available for labor costs incurred after December 31, 2021 through December 31, 2026.
• Repeal of Existing Tax Credits and Incentives for the Oil and Gas Industry: To mitigate the cost of the changes described above, the Budget proposes repealing certain existing tax credits and other incentives that the administration views as providing an excessive benefit to the oil and gas industry. These existing tax benefits generally would be repealed for taxable years beginning after December 31, 2021 and include the following:
  • Section 43 enhanced oil recovery tax credit for eligible costs attributable to a qualified enhanced oil recovery project
  • Section 45I tax credit for oil and gas produced from marginal wells
  • Expensing intangible drilling costs under Sections 263(c) and 291
  • Section 193 deduction for costs paid or incurred for any tertiary injectant used as part of a tertiary recovery method
  • Section 469 exception to passive loss limitations provided to working interests in oil and natural gas properties
  • Use of percentage depletion with respect to oil and gas wells
  • Section 167(h) two-year amortization of independent producers’ geological and geophysical expenditures (instead allowing amortization over the seven-year period currently used by integrated oil and gas producers)
  • Expensing exploration and development costs
  • Capital gains treatment for royalties under Section 631(c)
  • Exemption from corporate income tax for publicly traded partnerships with qualifying income and gains from activities relating to fossil fuels (for taxable years beginning after December 31, 2026)
  • Oil Spill Liability Trust Fund excise tax exemption for crude oil derived from bitumen and kerogen-rich rock
  • Accelerated amortization for air pollution control facilities

¹ On June 5, 2021, subsequent to the release of the Budget, in a landmark step, the G7 Finance Ministers (representing Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) committed to a global minimum tax rate (Pillar Two) of at least 15% on a country-by-country basis.