Multinational companies do not publicly report on where they are making their money or what taxes they are paying to whom. Investors, policymakers, and citizens have no idea exactly how they are gaming the system—what they tell us versus what they tell other countries. They should have to write it down in one place and report it on a country-by-country basis, so that the public, policymakers, and shareholders can see what they are really paying.
Without public country-by-country reporting, investors have little knowledge about the tax strategies of companies they own and the degree to which they may be engaging in risky tax behavior. The Securities and Exchange Commission must address the chasm between what companies know and what they disclose to investors.
On August 16, President Biden signed the Inflation Reduction Act (IRA) into law. The IRA, among other things, creates a corporate alternative minimum tax (CAMT) that applies a 15 percent minimum tax on the largest corporations worldwide, aggregate “book” income, adjusted for certain identified tax preferences.
On August 8, the FACT Coalition applauded the inclusion of crucial investments in the Internal Revenue Service (IRS), and specific measures to combat tax dodging by multinational corporations in the Inflation Reduction Act of 2022, which the Senate enacted over the weekend.
FACT’s latest report, “A Material Concern: The Investor Case for Public Country-by-Country Tax Reporting,” explores how public country-by-country reporting (PCbCR) efforts have matured and, in doing so, shown their increasingly apparent usefulness to investors.
Investors are exposed to material tax and geopolitical risks because of a lack of tax and other financial transparency, according to a report released today by the Financial Accountability and Corporate Transparency (FACT) Coalition. To give investors greater visibility into these material risks, the FACT Coalition report calls on the Securities and Exchange Commission (SEC) to use its current authority to implement rules for public country-by-country reporting (PCbCR) regarding revenues, profits, operations, and taxes paid and accrued.
This new appropriations budget represents a 31 percent increase in FinCEN’s budget over FY2022 enacted levels and meets the amount requested by the Biden Administration in the President’s discretionary budget request earlier this year.
