July 26, 2011
Monique Perry Danziger, +1 202 293 0740 ext. 222
New Legislation Would Close Offshore Tax Loopholes, Increase Financial Transparency and Accountability
WASHINGTON, DC – Representative Lloyd Doggett will introduce the “Stop Tax Haven Abuse Act” today, taking aim at offshore tax haven abuses, which cost the U.S. Treasury approximately $100 billion in lost tax revenue per year. The bill contains an array of provisions which would permanently close offshore tax loopholes, raise revenue, and increase transparency and accountability for multinational businesses. A Senate version of the bill was introduced by Senator Carl Levin on July 12 and was cosponsored by Senators Bill Nelson, Sanders, Shaheen, and Whitehouse. The legislation is supported by business leaders and public interest groups including Global Financial Integrity.
“Passage of the Stop Tax Haven Abuse Act would be a game changer, and introduction of the bill in the House with a significant number of cosponsors demonstrates that both chambers recognize the need to address tax haven abuse” said Global Financial Integrity (GFI) director, Raymond Baker. “The bill aims to close offshore tax loopholes, remove incentives to send money and jobs overseas, level the playing field between small businesses and multinational corporations, and strengthen law enforcement and tax collection capacities.”
The Stop Tax Haven Abuse Act also contains a provision (§201) to require annual country-by-country reporting by SEC-registered corporations related to their employees, sales, purchases, sales, financing arrangements, and taxes. This provision is similar to §1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which requires all U.S. and foreign companies registered with the United States Securities and Exchange Commission to publicly report how much they pay governments for access to their oil, gas and minerals.
“The country-by-country reporting provision adds a layer of pro-investment, best practices accountability to this bill,” said Mr. Baker. “For investors, understanding how a company is using tax havens, in many cases in an effort to avoid taxation somewhere in the world, allows them to better understand the risks that business may be taking in terms of potential actions by national tax agencies. This reporting requirement would also help anti-corruption and economic development efforts in developing countries by creating more transparency and accountability in the business dealings between multinational companies and governments.”
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Notes:
- A complete breakdown (in layman’s terms) of the Act is available on the Citizens for Tax Justice website here.
- Click here for more information on country by country reporting.
- Click here for resources on the Senate version of the Stop Tax Haven Abuse Act
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Global Financial Integrity (GFI) is a Washington, DC-based research and advocacy organization which promotes transparency in the international financial system.
For additional information please visit www.gfip.org.