Country-by-Country Reporting

New Bill Removes Tax Incentives to Shift Profits and Operations Offshore

“No Tax Breaks for Outsourcing Act” Endorsed by 57 National Organizations, Sponsored by 80 Members of Congress

WASHINGTON, D.C. – Eighty lawmakers introduced legislation Wednesday that would equalize the tax rates for domestic businesses and multinational corporations — reducing the tax incentive to shift profits and operations overseas that were enacted under the recent tax overhaul, according to the Financial Accountability and Corporate Transparency (FACT) Coalition.

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Sustainability Panel Proposes Tax Transparency Standard

Global Reporting Initiative’s Proposal Could Bring Public Country-by-Country Reporting of Taxes, Profits, Revenues, and Employees to More than 4,000 Companies

Plan Comes as U.S. Senators Call on GM to Disclose Country-by-Country Data

WASHINGTON, D.C. – A global sustainability standards-setting body issued a proposal Thursday to have multinational companies publicly disclose basic financial information on a country-by-country basis, in a move praised by transparency advocates.  The Sustainability Reporting Standards from the Global Reporting Initiative (GRI) are voluntarily followed by over 4,000 businesses in more than 90 countries.  The draft GRI “Standard on Tax and Payments to Governments” was developed by a multi-stakeholder technical committee consisting of representatives from PricewaterhouseCoopers, MFS Investment Management, Vodaphone PLC, and the Tax Justice Network, among others.

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Muddled Markets

Investors are at an increasing risk due to the lack of information disclosed by companies about their tax practices, according to this November 2018 report published by the Financial Accountability and Corporate Transparency Coalition (FACT Coalition). Titled “Muddled Markets: Investors Increasingly at Risk from Lack of Disclosures about 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. At the same time, shifting national policies around international taxation — including, but not limited to, the recent tax overhaul in the United States — create complexity and uncertainties with respect to returns for investors.

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New Study: Shareholders at Risk from Lack of Corporate Tax Disclosures

Investors and Analysts Call for More Disclosures around Offshore Tax Practices as Shifting Tax Policies and Increased Enforcement Actions Impact Shareholder Value

WASHINGTON, D.C. – Investors are at an increasing risk from the lack of information disclosed by companies about their tax practices, according to a new analysis published today by the Financial Accountability and Corporate Transparency (FACT) Coalition.

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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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Tax Transparency Fights Tax Avoidance

By Gary Kalman

Justice Brandeis once famously said that “sunlight is the best disinfectant.”  It is a quote advocates for government and corporate transparency have repeated each time we are asked if any of “this stuff” makes a difference.  For the record, it does.

The latest evidence comes from a recent report produced by two German academics looking at whether a European Union (EU) tax transparency initiative had any measurable impact on corporate behavior.

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