Press Releases & Statements

Australian Advancement of Public Country-by-Country Reporting Builds Pressure for U.S. Action

The Securities and Exchange Commission Should Move to Protect Investors and Others through Public Tax Disclosure

Washington, DC – The Financial Accountability and Corporate Transparency (FACT) Coalition applauds the Australian Treasury for today’s budget proposal to enact strong public country-by-country reporting (PCbCR) requirements for certain large multinational enterprises (MNEs), including entities headquartered in foreign jurisdictions. To ensure that investors and other users of financial statements have access to comparable and decision useful information, improve capital allocation and international policy decisions, and reduce market volatility, the U.S. Securities and Exchange Commission (SEC) should move quickly to adopt similar PCbCR requirements in the United States.

“Australia’s leadership on the issue of global tax transparency should act as a call to action for other nations, including the United States, to enact best practices in tax transparency consistent with the standards promulgated by the Global Reporting Initiative,” said Ian Gary, FACT’s Executive Director.

The proposal put forward by the Australian Treasury is broad enough to require any public or private enterprise with an annual income above AU $1 billion (US$632 million) to report this information for income years beginning on or after July 1, 2023. The proposal is also broad enough to cover entities both headquartered in Australia and in foreign jurisdictions, including the United States. Implemented correctly, these laws might require disclosure from U.S. multinationals with an established presence in Australia, such as Nike or Hewlett Packard, neither of which paid any U.S. income tax in 2020, and both of which had an effective tax rate of less than 15% during each of the last three fiscal years. Or, among many others, Microsoft and Cisco, who are presently the subject of shareholder resolutions that would have these companies report PCbCR annually consistent with GRI standards. 

The Australian government will next introduce legislation to enact these tax transparency proposals in the coming weeks and months. With a large governing majority, the proposal is expected to be enacted quickly. 

“Australia has taken an important first step to arm investors, policymakers, and other users of financial statements with the information necessary to invest smartly and govern better,” said Gary. “It’s tag – you’re it, for the United States, now.”

In September, the FACT Coalition submitted comments on the Australian Treasury’s PCbCR proposal within its Multinational Tax Integrity and Tax Transparency consultation. Chief among FACT’s recommendations was ensuring that both Australian and foreign-headquartered large MNEs, including those headquartered in the United States, be subject to PCbCR requirements under the Australian rules. 

“It is vital that Australia maintain its proposed definition and implement final laws that require PCbCR reporting from any MNE with established taxable contacts in Australia, consistent with similar Australian reporting standards,” said Ryan Gurule, Policy Director at the FACT Coalition. “Doing so will not only represent an unprecedented opportunity for investors to gain access to vital information on the material, operational, and regulatory risks facing particular large multinationals, but also set a precedent for the advancement of PCbCR internationally.”

FACT also urged Australia to avoid PCbCR that would only reveal information with respect to a limited scope of jurisdictions, such as is the case with the limited PCbCR requirements adopted by the European Union (EU) in November 2021. The inevitably political nature of decisions that determine which countries are included or excluded from the EU PCbCR requirements may result in incomplete disclosure. Such incomplete disclosure may shield aggressive corporate tax planning activities that create risks to investors and tax systems. 

“The Australian government is showing global leadership,” said Jason Ward, Principal Analyst at the Centre for International Corporate Tax Accountability & Research in Australia. “Public country by country reporting for multinationals is long overdue. Increased transparency and other multinational tax reforms will encourage an end to abusive tax schemes – which deprive governments of revenue to fund essential public services – and begin to level the playing field for local businesses that pay a fair share and contribute to communities where profits are generated.” 

In June of 2021 – buoyed by the support of investors with trillions of dollars in assets under management – the U.S. House of Representatives passed the Disclosure of Tax Havens and Offshoring Act, which would mandate PCbCR for U.S.-based multinationals. The bill has stalled in the Senate, but shareholder advocacy in the United States for tax transparency has not slowed. Most recently, shareholders have pushed Amazon, and are currently pushing Microsoft and Cisco Systems, to implement PCbCR. Independent investors representing 21% of Amazon’s outstanding shares voted in support of these efforts at Amazon’s annual meeting on May 25, 2022. Separately, Hess Corporation and Newmont Mining Corporation became the first U.S. headquartered public filers producing PCbCR reports along GRI standards late this summer. 

“The good news for investors and other users of financial statements is that the Securities and Exchange Commission has clear authority to require public country-by-country reporting today,” said Gurule. “In light of recent progress in Europe, and particularly in the aftermath of today’s news out of Australia, the SEC has an obligation to act quickly to ensure that investors, policy makers, academics, civil society actors, and other stakeholders have access to the comparable and symmetrical information necessary to make sound investment and governance decisions.”

The FACT Coalition now calls on the SEC to exercise its rulemaking authority to require PCbCR for large reporting companies within the United States to begin no later than July 2023, the date that reporting will become mandatory in Australia. This rulemaking should complement, accelerate, and – as necessary and applicable – preempt portions of the Financial Accounting Standards Board (FASB) tax disaggregation guidance project.

“Australia’s full PCbCR adoption signals that the tax transparency train has left the station,” said Gary. “This investor and stakeholder led-movement now has considerable momentum, and full PCbCR in the United States is the next stop.”


Notes to the Editor:

  • The Australian budget document containing the Treasury’s proposed PCbCR requirements can be found here.
  • The FACT Coalition’s September recommendations to the Australian Treasury can be found here.
  • The Australian Treasury’s original Multinational Tax Integrity and Tax Transparency consultation can be found here.
  • FACT’s recent report, “A Material Concern: The Investor Case for Public Country-By-Country Reporting”, can be found here.