Briefing Memos

Briefing Memo: Publicly Traded Companies Should Publicly Report Where They Are Booking Profits and Paying Taxes

As governments around the world begin to crack down on aggressive offshore tax avoidance, numerous companies find themselves in the crosshairs of tax authorities.  Alphabet (Google),3 Amazon,4 Apple,5 Caterpillar,6 Gap,7 Facebook,8 Hewlett-Packard,9 McDonalds,10 Microsoft,11 Shell,12 and Starbucks13 have all faced penalties or are in disputes with tax authorities over their aggressive tax avoidance practices.

The new tax law will do little to change the risk factors.  While Congress eliminated deferral of taxes for profits booked offshore, the new 50% (or greater) discount on the overseas rate creates a powerful new incentive to move money overseas.14

For policymakers, investors, and other stakeholders to better understand how the tax laws operate in practice, there is a need for public country-by-country reporting (CbCR) of certain revenue, profit, tax, and other information for multinational corporations (MNCs).

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Briefing Memo: Ending Offshore Tax Avoidance

There is widespread agreement, across the political spectrum, that the gaming of the tax code by multinational corporations is a problem. When profits and jobs are shipped offshore, we not only harm the U.S. economy, we fuel a tax haven industry that drains wealth around the world.

The tax system under the Tax Cuts and Jobs Act includes loopholes and incentives to shift money and jobs overseas.

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How Anonymous Shell Companies Finance Insurgents, Criminals, and Dictators

The Panama Papers leak of eleven million documents in April 2016 revealed that former Iraqi Prime Minister Ayad Allawi, the brother-in-law of Chinese President Xi Jinping, longtime friends of Russian President Vladimir Putin, drug kingpins, and even a soccer megastar had something in common: they all channeled money through anonymous shell companies. Anonymous shell companies are entities that usually employ few or no workers, do not conduct any substantive business, and allow their owners to store or route money while hiding their identities.

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Briefing Memo: FATCA

Questions & Answers about the Foreign Account Tax Compliance Act (FATCA)

FATCA is the Foreign Account Tax Compliance Act, which was adopted in 2010 to help pay for the HIRE (Hiring Incentives to Restore Employment) Act. FATCA requires foreign financial institutions (FFIs) to determine if accounts they have opened are held, directly or indirectly, by Americans and, if so, disclose them to the Internal Revenue Service (IRS). Any FFI that refuses to provide this information to the United States is subject to a 30% withholding tax on the FFI’s U.S. source income.

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Briefing Memo: Tax Reform

Important Steps to Fix the Gaming of the Corporate Tax System

A common theme from both Democrats and Republicans in the recent election was the increasing problem that multinational companies are moving money and jobs offshore. These practices are encouraged by loopholes in the tax code, which encourage companies to move. These loopholes should be closed.

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