In this article—originally published in Tax Notes—FACT Executive Director Gary Kalman uses the recent Apple tax ruling by the European Commission to identify problems with proposals for a territorial tax system in the United States. He argues that policymakers should instead focus on ending deferral, requiring public country-by-country reporting, and adopting provisions of the Stop Tax Haven Abuse Act.
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.
In May, the Treasury Department released a final rule that was meant to increase scrutiny on banks to know the customers with which they do business. Despite the fact that we believe the Treasury rule should have been much stronger, banks are on the front-line of the battle against terror financing and criminal money laundering and do have real anti-money laundering obligations. But, there’s just one problem. Banks are having a tough time verifying who their customers are because incorporating a company in the U.S. doesn’t require owners to disclose their real names. Banks are now asking that the federal government change that.
The Clearing House Association, which represents the largest commercial banks, sent a letter to congressional lawmakers in support of the bipartisan Incorporation Transparency and Law Enforcement Assistance Act (H.R.4450, S.2489). The Clearing House includes major banks like Bank of America, Citibank, and JPMorgan Chase, and Wells Fargo. As FACT member Global Witness explains, “without a way to ensure there’s comprehensive collection of beneficial ownership information for U.S. companies, it will be hard for banks to comply with new regulations that require them to find out who are the beneficial owners of their corporate clients.”
The FACT Coalition submitted the below letter to the House Ways and Means Committee in reference to a February 24, 2016 Hearing on International Tax Reform.
FACT Coalition Submits Comments to House Ways and Means Committee Ahead of International Tax Reform Hearing
WASHINGTON, D.C. – Ahead of a planned hearing on international tax reform, the FACT (Financial Accountability and Corporate Transparency) Coalition today submitted comments to the U.S. House Committee on Ways and Means urging lawmakers to focus reform efforts on closing offshore loopholes and ending tax haven abuse.
The FACT Coalition submitted the attached comments to the Senate Finance Committee’s Business Income and International Working Groups in April 2015 regarding principles and options for reforming the business tax code.
