Section 267A Is a Headache — Does Pillar Two Make It Worse?

The Pillar Two rules combine the income and loss of all related entities that are located in the same jurisdiction for purposes of determining whether any Pillar Two top-up tax is owed for that jurisdiction. One effect of this Pillar Two “jurisdictional blending” rule is that a foreign entity’s deductions could be viewed as offsetting the income items of every other related entity that is also located in the foreign entity’s jurisdiction. Now that Pillar Two is live in multiple countries, U.S. taxpayers are (rightly) concerned that this forced jurisdictional blending could greatly expand the frequency with which the dual ...