Rep. Pocan Introduces Bill to Strengthen Corporate Tax Disclosure and Transparency
WASHINGTON, D.C. – Today, U.S. Rep. Mark Pocan (WI-02) introduced the Corporate Transparency and Accountability Act to shed light on tax avoidance and profit shifting activities. This legislation would require the disclosure of country-by-country and bottom line information about companies’ taxes to increase transparency for investors and the general public.
“As corporations continue to dodge taxes by shifting massive profits to overseas tax havens, it is now more important than ever to increase transparency around these actions,” Rep. Pocan said. “My legislation will show exactly where public companies are paying their taxes and engaging in business activity so investors and the general public are able to assess investment risk and identify tax avoidance activities.”
“With nearly two and a half trillion dollars booked offshore and governments cracking down on abusive tax avoidance, shareholders are increasingly at risk from the dearth of information available to them about the tax practices of the companies in which they invest. One needs to look no further than the decision requiring Apple to pay billions in back taxes to understand the growing risk. The bill calls for the kind of transparency that makes markets safer, more stable, and serve the needs of investors,” said Clark Gascoigne, deputy director of the FACT Coalition.
In June, the Treasury Department issued a rule directing large companies – those with $850 million or more in annual revenue – to provide the Internal Revenue Service (IRS) with financial data, including income and taxes paid, broken down by each country in which they operate. While the Treasury Department regulation offers an important step in tackling offshore profit shifting, we must take additional actions to strengthen transparency around multinational business activity.
Under the Corporate Transparency and Accountability Act, all publicly traded companies are directed to include country-by-country financial information in their public Securities and Exchange Commission (SEC) filing. This information mirrors the data collected by the IRS about large multinational companies under the Treasury Department’s recent rule, and includes country-by-country income, taxes paid, and indicators of economic activity. The legislation also requires the disclosure of total pre-tax profits and the amount paid in state, federal, and foreign taxes by public companies.