FACT Applauds Reintroduction of Legislation to Expose Continued Abuse of Offshore Tax Havens by U.S. Corporations

The Disclosure of Tax Havens and Offshoring Act Would Help Inform Policy Debates Around Tax, Protect Investors, and Deter Profit Shifting

WASHINGTON, DC – FACT applauds the reintroduction by Senator Chris Van Hollen (D-MD) and Representative Brittany Pettersen (D-CO-7) of the Disclosure of Tax Havens and Offshoring Act, legislation that would require American multinational corporations to publish expanded financial information on their offshore operations, known as public country-by-country reporting (CbCR).

The legislation’s reintroduction comes on the heels of a number of developments that reinforce the need for greater tax transparency, including the OECD’s capitulation to the Trump administration in exempting U.S. companies from large parts of the globally-agreed corporate minimum tax, and bombshell reporting drawing on new accounting disclosures that illustrate the continued use of tax havens by iconic American brands.

Zorka Milin, FACT co-director, said in a statement:

“We applaud Senator Van Hollen and Representative Pettersen for leading this vital legislation to pull back the curtain of tax secrecy and strengthen our tax system. Recent accounting disclosures have provided fresh evidence of widespread tax haven use among the nation’s largest and most profitable companies. Increased transparency is essential to creating a fairer corporate tax system that raises needed revenue and protects American manufacturing and jobs from offshoring.”

###

Notes to the Editor:

Click here to read the text of the Disclosure of Tax Havens and Offshoring Act.
While Australia and the European Union have implemented laws requiring public country-by-country reporting for certain large multinationals, both regimes require reporting only on a limited number of jurisdictions, and are subject to economic presence tests and other thresholds that limit the number of affected companies. The Disclosure of Tax Havens and Offshoring Act represents by far the most comprehensive and effective set of reporting requirements contemplated by any major jurisdiction to date.
Similarly, new tax reporting requirements issued by the Financial Accounting Standards Board (FASB) are also providing fresh insights into the continued use of low-tax jurisdictions by American multinationals. These disclosures were crafted for the specific purpose of informing capital allocation decisions by investors, and are complementary to, rather than a replacement for, full public country-by-country reporting.
The Disclosure of Tax Havens and Offshoring Act passed the House of Representatives in 2021, but was not ultimately signed into law. The legislation was supported by nearly 100 civil society organizations, dozens of investors collectively representing more than $3 trillion in assets under management, the American Sustainable Business Council, and a number of small business organizations.