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Deferral

Just the FACTs: November 28, 2016

Increasingly the issues of tax avoidance and financial secrecy are drawing the attention of a broader audience.  Both issues were repeatedly mentioned throughout the presidential election by both candidates.  Donald Trump’s original tax plan even went as far as to end deferral, though updates to the plan in September omitted any position on it.  With the results of the election in, FACT and our members are analyzing what they mean for reform here at home.  More on that in the weeks to come.

The EU commission’s decision in August to force Apple to pay back $14 billion in dodged taxes to Ireland served as a wake-up call to many investors—tax avoidance is a serious risk.  A recent article in the Financial Times, explained how several major funds and investment groups are deeply concerned with companies’ increasing reliance on tax avoidance schemes.  One such fund, Nordea Asset Management—has written to a number of companies—including Alphabet and Apple.  In the letter, they ask that companies lay out their tax risks and that—if they don’t comply by January—they “will rally other investors and propose shareholder resolutions in 2017.”  Four other fund houses in the UK—representing almost £1tn of assets—have also written to the board of Alphabet to raise concerns about its tax arrangements.

 

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FACT Sheet: Questions & Answers about Territorial Corporate Tax Systems

A central theme of corporate tax reform is how to create a system that works in a global economy. Several proposals have called for a territorial corporate tax system — a system in which a company only pays taxes on what it claims as profits in a given country rather than looking at the companies’ global footprint.

Below are questions and answers about territorial tax systems as outlined in recent reform proposals.

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New Report: Multinationals Dodging $718bn in U.S. Taxes on Profits Booked Offshore

New Analysis Underscores Need to End Deferral, Boost Transparency of Companies’ Offshore Tax Practices
WASHINGTON, D.C. – The largest American companies have stashed nearly $2.5 trillion in profits offshore allowing them to dodge $718 billion in U.S. taxes, according to a new report released Tuesday by Citizens for Tax Justice (CTJ), the Institute on Taxation and Economic Policy (ITEP), and the U.S. Public Interest Research Group (PIRG) Education Fund—all members of the Financial Accountability and Corporate Transparency Coalition (FACT Coalition).

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Apple Ruling Puts Emphasis on Need to End ‘Deferral’—the Biggest Tax Dodge

Administration and Congress Should Focus on Collecting the Remaining $51.5 Billion that Apple Owes American Taxpayers
U.S. corporations woke up today to find that the European Commission ruled that Apple must re-pay Ireland roughly $14.5 billion it provided in illegal tax breaks.

According to The Wall Street Journal:
The European Union’s antitrust regulator has demanded that Ireland recoup roughly €13 billion ($14.5 billion) in taxes from Apple Inc., after ruling that a deal with Dublin allowed the company to avoid almost all corporate tax across the entire bloc for more than a decade—a move that could intensify a feud between the EU and the U.S. over the bloc’s tax probes into American companies.
With all of the finger pointing and spin, it’s important to take stock of the facts.

Let’s be clear—Apple’s pretense that it is a good corporate citizen that pays its taxes is now over.

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Main Street

FACT Praises Introduction of Bills to Curb Abusive Tax Dodging by Multinationals

Putting America First Corporate Tax Act Would End Loophole Enabling Largest Companies to Indefinitely “Defer” Paying Taxes on Offshore Profits
Corporate Fair Share Tax Act Would Deter Multinationals from Renouncing American Citizenship to Avoid Paying Taxes
WASHINGTON, DC – The FACT (Financial Accountability and Corporate Transparency) Coalition welcomed the introduction of two pieces of legislation by Representative Mark Pocan (D-WI) to close corporate tax loopholes costing U.S. taxpayers hundreds of billions of dollars.

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