Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

For Immediate Release

Press Release

Congress Introduces Corporate Tax Transparency Legislation to Support Informed Investor Decisions

FACT coalition applauds disclosure of tax havens and offshoring act backed by investors with close to $2.9 trillion in assets under management.

The Financial Accountability and Corporate Transparency (FACT) Coalition today welcomed the reintroduction of the Disclosure of Tax Havens and Offshoring Act in the House and Senate (H.R. 3007, S. 1545). Led by Rep. Cynthia Axne (D-IA) and Sen. Chris Van Hollen (D-MD), the legislation would require multinational corporations to disclose their taxes paid and other key information publicly on a country-by-country basis.

“With major changes to the U.S. and global corporate tax regimes on the horizon, investors and the public need better information to understand the impact of these changes,” said Ian Gary, executive director of the FACT Coalition. “With the global pandemic and economic crises draining government coffers around the world, greater attention is rightly being paid to corporate tax avoidance, including by companies making huge profits. The Disclosure of Tax Havens and Offshoring Act provides a much-needed spotlight on corporate profit shifting and tax avoidance strategies, both to protect investors and inform policymakers and the public.”

The legislation introduced today would require multinational corporations registered with the Securities and Exchange Commission (SEC) to disclose basic financial data ­­­– including profits, taxes paid, number of employees, and tangible assets – about their operations and subsidiaries overseas. Under an international OECD framework, this country-by-country reporting (CBCR) is already privately reported to the IRS, making any public reporting burdens negligible.

Investor groups with close to $2.9 trillion in assets under management pushed for quick movement on the legislation in an open letter released today. “Investors require income and tax information at the country-by-country level to better understand a company’s financial, reputational, and economic risks to make informed investment decisions,” the investors said. “With global momentum growing to significantly change how multinational corporations are taxed – including through the Administration’s tax change proposals and the OECD negotiations – investors now, more than ever, need information to inform them on how their holdings may be affected by changes to U.S. tax law.”

The Biden Administration and Congress are increasingly focused on cracking down on tax avoidance and evasion, including plans to provide more resources to the Internal Revenue Service (IRS). So called “aggressive tax planning” can carry material risks for investors in multinational companies. For example, in November the U.S. Tax Court supported IRS allegations that Coca-Cola used profit-shifting to underpay taxes and the company is facing a possible $12 billion tax liability through 2020.

The introduction of the legislation represents further momentum in the global push for greater multinational tax transparency. The European Union is currently finalizing public country-by-country reporting requirements through negotiations between the European Council, European Parliament and European Commission. The Global Reporting Initiative (GRI), an international standard-setting body whose reporting guidelines are followed by more than three-quarters of the companies listed on the Dow Jones Industrial Average, adopted new a new voluntary public country-by-country reporting tax transparency standard in January. Several major global multinational companies, such as Shell and Vodafone, already publish public country-by-country reports. In February a United Nations panel, the UN High-Level Panel on International Financial Accountability, Transparency, and Integrity, endorsed public country-by-country reporting in its final report.

Public country-by-country reporting is widely backed by a broad range of civil society groups, from labor union confederations such as the AFL-CIO, to small business groups, to economic justice, racial justice, and environmental justice organizations. Ninety-six civil society organizations issued a joint statement today urging Members of Congress to cosponsor the legislation.

“Increasing tax transparency through public disclosure will induce large corporations to clean up the most questionable tax practices — boosting revenues to combat the economic and health ramifications of the virus, invest in infrastructure, and other priorities,” the statement said.


FACT Coalition logo

The Financial Accountability and Corporate Transparency (FACT) Coalition is a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system that addresses the challenges of a global economy and promoting policies to combat the harmful impacts of corrupt financial practices.

Citing Donziger Case, Dems Raise Alarm About Use of Private Prosecutors in Federal Court

Private prosecutions of criminal contempt charges, said a pair of senators, "are highly unusual and can raise concerning questions of fundamental fairness in our criminal justice system."

Jessica Corbett ·

'About Damn Time': DOJ Says Treasury Department Must Give Trump's Tax Returns to Congress

"This case is now bigger even than Donald Trump's crimes. Neither the courts, nor the machinery of our government, exist to bodyguard a corrupt private citizen from transparency."

Jake Johnson ·

Digital Rights Groups Hail Record €746 Million Amazon Data Privacy Fine

La Quadrature du Net, whose complaint led to the Luxembourg fine, called the penalty a "first step," but said that "we need to remain vigilant" in the face of Amazon's ongoing violations.

Brett Wilkins ·

Science Museum Just Killed Its 'Own Reputation,' Says Greta Thunberg After Docs Reveal Gag Clause With Shell

"It essentially creates a 'chilling effect,' where museum staff must refrain from speaking openly about the reality of Shell's activities."

Andrea Germanos ·

With New Guaranteed Income Bill, Omar Proposes Sending Most People in US $1,200 Per Month

"We as a nation have the ability to make sure everyone has their basic needs like food, housing, and healthcare met," said the Minnesota Democrat.

Kenny Stancil ·