WASHINGTON, DC – In response to testimony by Gary Gensler, Chair of the Securities and Exchange Commission (SEC), before the Senate Committee on Banking, Housing, and Urban Affairs, Ian Gary, Executive Director of the FACT Coalition, said in a statement:
“We are pleased that Chair Gensler indicated today that the SEC is looking at the need for increased tax and financial reporting by big multinational companies to inform investors and other stakeholders. With a changing and complex global tax environment, investors are flying blind without increased transparency regarding where multinational corporations book profits and pay taxes. The SEC should move expeditiously to provide financial and tax information on a country-by-country basis to reduce investor risk.
“We applaud Senator Chris Van Hollen for raising this issue in the hearing and for his leadership on the Disclosure of Tax Havens and Offshoring Act, which would require the SEC to put in place public country-by-country reporting (PCBCR) requirements. Jurisdictions around the world, including the European Union and Australia, are moving to increase tax transparency, and the U.S. should follow suit.
“Senator Van Hollen told Chair Gensler today that companies stashing their profits in ‘sketchy tax havens’ are putting their investors at risk. We couldn’t agree more, which is why the SEC must move quickly to improve tax transparency of multinational companies to provide material information to inform investment decisions.
“In addition to the SEC examining the issue, Chair Gensler indicated possible action by the Financial Accounting Standards Board to accelerate disaggregated disclosure requirements through its income tax project. We believe action by FASB should make clear that greater country-by-country tax disaggregation should apply to all publicly filing companies, in a manner that supports and complements potential SEC rulemaking.”
Note to the Editor:
- Click here to read FACT’s July report, “A Material Concern: The Investor Case for Country-by-Country Reporting,” which provides analysis of how public country-by-country reporting of tax and financial data can help investors and other users of financial statements mitigate risks relating to free cash flow, corporate governance and operational practices, and geopolitical concerns, among other benefits. (You can watch the launch event here.)
- Click here for FACT’s comment to the Australian Treasury as part of its request for comment on public country-by-country reporting.
- In May, the SEC stood with investors by overruling Amazon’s opposition to a vote on tax transparency as part of the corporation’s annual general meeting. More than 21 percent of independent shareholders backed the proposal, including prominent investors such as Norway’s state pension fund, UK investment fund Legal & General Investment Management, and the New York City Comptroller. Proxy advisory firms such as Glass Lewis and Morningstar also recommended voting in favor of the proposal.