September 22, 2016
Heather Lowe, +1 202 293 0740 ext. 228
Representatives Jan Schakowsky, Lloyd Doggett, and Gwen Moore Sign on as Co-Sponsors of the Corporate Transparency and Accountability Act
WASHINGTON, DC – Representative Pocan (D-WI), with Representatives Jan Schakowsky (D-IL), Lloyd Doggett (D-TX),and Gwen Moore (D-WI), today introduced the Corporate Transparency and Accountability Act to increase corporate financial transparency. As Congressional leaders continue to drag their feet in addressing the now pervasive issue of multinational companies shifting their profits offshore to avoid taxation, Representative Pocan, and Representatives Jan Schakowsky, Lloyd Doggett, and Gwen Moore have drawn a new line in the sand.
Building on an existing provision in the proposed Stop Tax Haven Abuse Act, the Corporate Transparency and Accountability Act would require multinational companies that have to file annual or quarterly reports with the SEC to provide a breakdown of basic financial information on a country-by-country basis. Currently their SEC reporting is only in aggregate form, which can disguise their true financial picture.
“Today, neither legislators nor investors have any reliable information about multinationals’ profit shifting practices apart from the result of them—less revenue in the U.S. treasury and greater risk of enforcement actions worth billions of dollars,” commented Heather Lowe, Legal Counsel and Director of Government Affairs at Global Financial Integrity.
Those risks have only grown over the past few years. Since 2013, Congressional hearings, articles, and EU inquiries have exposed the profit shifting practices of Apple, Starbucks, and Google, among others. These examples highlight how it has become common in international business for companies to artificially shift their profits out of the nations in which they are generated and into tax havens to avoid taxation.
“Legislators cannot possibly be expected to adopt measures to address a problem when they cannot access even the most basic data they need to fully understand it,” said Ms. Lowe. “The SEC is the primary place where that type of transparency can be required, and what the bill requires is simply a disaggregation of aggregate financial information that is already disclosed to the SEC.”
Global Financial Integrity’s President, Raymond Baker, concluded by saying, “This information is becoming more and more critical to investors as well. The global crackdown on offshore tax havens and profit shifting exposes the companies that they invest in, and therefore their investments, to significant penalties if they’ve been found to be pushing the boundaries of acceptable tax planning. Investors need to have better insight into the decisions companies are making with respect to their tax arrangements so that investors can make better decisions about where they put their money.”
For all press inquiries or to schedule an interview with Ms. Lowe, contact Christine Clough at firstname.lastname@example.org / +1 202 293 0740, ext. 231. On-camera spokespersons are available in Washington, DC.
Note to Editors
- Click here to read GFI’s letter to Representative Pocan supporting the bill.
- Click here to read the press release from Representative Pocan on the bill’s introduction.
- Click here to read about U.S. Treasury, IRS efforts on country-by-country reporting.
- Click here to read Ms. Lowe’s testimony from the IRS’ May 13, 2016 Hearing on the Proposed Country-by-Country Reporting Requirement.
- Click here to read the Financial Accountability and Corporate Transparency Coalition’s new report on corporate tax disclosure, A Taxing Problem for Investors.