Loren Ponds discussed the potential implications of Congress's inability pass the modifications to the global intangible low-tax income (GILTI) provision, which are widely understood to be required for compliance with the global minimum tax standard under Pillar Two of the Organization for Economic Cooperation and Development's (OECD) plan. Currently, GILTI is not calculated on a per-country basis and the rate on GILTI earnings is below the 15 percent global minimum rate agreed to by the OECD's Inclusive Framework in October 2021, Ponds explained during a panel discussion at the America Bar Association tax section's midyear meeting. She said the disparities between the OECD plan and the U.S. international tax regime pose open questions about whether GILTI will be considered compliant under the incoming Pillar Two regime without the changes proposed in the Build Back Better Act. On a more narrow issue, the inability to reform GILTI could have acute consequences for foreign-parented multinationals with U.S. subsidiaries that own controlled foreign corporations (CFCs) as the countries in the OECD's inclusive framework begin to implement Pillar Two. Ponds said the CFCs in a "sandwich structure" could face taxes under the U.S.'s GILTI system in its current state, in addition to the ultimate parent company potentially being subject to a top-up tax. "There are some real implications to not having GILTI be compliant for those who are below the U.S. structure essentially, because you still have no mechanism to take into account those taxes that are paid."