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Tax Transparency

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.

Broad Coalition Calls for Greater Disclosure Requirements from the SEC

WASHINGTON, D.C. – Nine groups—the AFL-CIO; Americans for Financial Reform; the Center for American Progress; Ceres; the Financial Accountability & Corporate Transparency, or FACT, Coalition; the International Corporate Accountability Roundtable; Patriotic Millionaires; Public Citizen; and US SIF: The Forum for Sustainable and Responsible Investment—are joining together to urge the U.S. Securities and Exchange Commission, or SEC, to strengthen corporate disclosure requirements.

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Towards a Sustainable Economy

A Review of Comments to the SEC’s Disclosure Effectiveness Concept Release
The FACT Coalition joined eight other groups—the AFL-CIO; Americans for Financial Reform; the Center for American Progress; Ceres; the International Corporate Accountability Roundtable; Patriotic Millionaires; Public Citizen; and US SIF: The Forum for Sustainable and Responsible Investment—in releasing a report analyzing the more than 26,000 comments received in response to the U.S. Securities and Exchange Commission’s April 2016 concept release on “Business and Financial Disclosure Required by Regulation S-K”.

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Toward A Sustainable Economy: Transparency, Long-Termism, and the SEC

September 20, 2016 | 9:30am ET – 11:00am ET
Please join the Center for American Progress Action Fund, the AFL-CIO, Americans for Financial Reform, Ceres, the Financial Accountability & Corporate Transparency Coalition, the International Corporate Accountability Roundtable, the Patriotic Millionaires, Public Citizen, and US SIF: The Forum for Sustainable and Responsible Investment for a discussion on transparency, long-termism, and the state of SEC corporate disclosures.

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New Report: Investors at Risk by Lack of Corporate Tax Disclosures

Shareholders Increasingly Stymied by Opaque Corporate Tax Practices as Authorities Crack Down, Finds New FACT Analysis
Apple Tax Ruling “Just the Tip of the Iceberg”
WASHINGTON, D.C. – Investors are at an increasing risk due to the lack of information disclosed by companies about their tax practices, according to a new report published today by the FACT Coalition.

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A Taxing Problem for Investors

Shareholders Increasingly at Risk from Lack of Disclosure of Corporate Tax Practices
Investors are at an increasing risk due to the lack of information disclosed by companies about their tax practices, according to this September 2016 report published by the Financial Accountability and Corporate Transparency Coalition (FACT Coalition).  Titled “A Taxing Problem for Investors: Shareholders Increasingly at Risk from Lack of Disclosure of Corporate Tax Practices,” the report finds that multinational companies have become increasingly reliant on offshore tax avoidance practices to boost short-term earnings in recent years, yet disclosure requirements haven’t kept pace with this changing world.  As governments around the globe struggle with growing budget deficits, tax authorities are increasingly cracking down on aggressive tax avoidance practices, which can have a significant impact on shareholder value.

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Why the SEC Needs to Require More Disclosure from Companies

In 2015, Citigroup reported to the Security and Exchange Commission that it has 21 offshore subsidiary companies, but it reported to the Federal Reserve that it has 140. Similarly, Bank of America reported to the SEC that it has 21 subsidiaries while reporting to the Federal Reserve that it has 109. All told, 27 financial firms report wildly different numbers to the SEC v. Federal Reserve.

So what gives and which reporting is accurate? It turns out that SEC has less stringent reporting rules, requiring companies only to disclose “significant” subsidiaries. It defines significant as comprising 10 percent or more of the company’s assets. The Federal Reserve requires broader disclosure, but only for financial companies. A CTJ comparison of the disclosures revealed big banks and other financial firms collectively are under reporting to the SEC the number of subsidiary companies by a factor of more than seven.

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