American Energy Independence and Tax Fairness Act

This bill seeks to modify several provisions of the Internal Revenue Code related to the taxation of foreign oil and gas income. A primary change involves including foreign oil and gas extraction income in net Controlled Foreign Corporation (CFC) tested income, which would subject it to the Global Intangible Low-Taxed Income (GILTI) regime for U.S. shareholders. Furthermore, the legislation broadens the scope of what constitutes foreign oil and gas extraction income and foreign oil related income. It explicitly adds income derived from the extraction of minerals from oil shale and tar sands to these definitions, ensuring these activities are treated similarly to traditional oil and gas for tax purposes. A significant amendment also targets foreign tax credit rules for "dual capacity taxpayers" in the energy sector. Payments made by such taxpayers to foreign countries for combined foreign oil and gas income will not be considered creditable taxes if the country lacks a generally applicable income tax or if the payment exceeds what would be paid under such a tax by a non-dual capacity taxpayer. This aims to prevent certain payments, which may resemble royalties or other charges, from being claimed as foreign tax credits.