Build Back Better and Pillar Two: Two Alternative Scenarios

8 Pages Posted: 2 Mar 2022 Last revised: 5 May 2022

Date Written: December 30, 2021


Pillar Two of the OECD/Inclusive Framework BEPS project is a global extension of the Tax Cuts and Jobs Act (TCJA) Global Intangible Low-Taxed Income (GILTI) and Base Erosion Anti-Abuse Tax (BEAT). The proposed Build Back Better (BBB) legislation as passed by the House of Representatives amends both GILTI and BEAT to make them compatible with the Pillar Two framework as laid out in the Model Rules released by the OECD on December 20, 2021. However, there is now a serious question whether BBB will pass the Senate. If BBB is not enacted, there is doubt whether GILTI and BEAT as enacted by the TCJA are compatible with Pillar Two, and if not, the tax consequences are likely to be increased double taxation as well as a shift in revenues from the US to foreign jurisdictions.

Keywords: BBB, Pillar Two

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S., Build Back Better and Pillar Two: Two Alternative Scenarios (December 30, 2021). U of Michigan Public Law Research Paper No. 22-012, Available at SSRN: or

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

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