September 19, 2013
Clark Gascoigne, +1 202 293 0740 ext. 222
E.J. Fagan, +1 202 293 0740 ext. 227
Senators Levin, Whitehouse, Begich, Shaheen Introduce Legislation to Close Offshore Tax Loopholes and Foster Transparency
WASHINGTON, DC – As congressional leaders weigh presenting an overhaul of the U.S. tax code, Senators Carl Levin (D-MI), Sheldon Whitehouse (D-RI), Mark Begich (D-AK), and Jeanne Shaheen (D-NH) introduced legislation Thursday to increase transparency in the financial system and close several offshore tax loopholes. While the Joint Committee on Taxation estimates the bill would generate roughly $220 billion in U.S. government revenue over ten years, Global Financial Integrity (GFI) particularly welcomed the Stop Tax Haven Abuse Act (STHAA) for its impact on developing nations, which lose nearly $1 trillion per year in illicit outflows of money due to tax haven secrecy.
“This is a very welcome piece of legislation for both American and developing country taxpayers,” said Heather Lowe, legal counsel and director of government affairs at GFI—a Washington-DC based research and advocacy organization. “It would scrap several egregious offshore tax loopholes—helping to level the playing field between small businesses and multinational corporations, increasing information and transparency for investors, and strengthening law enforcement and tax collection abilities.”
Country-by-Country Reporting Provisions Key
GFI particularly highlighted the positive nature of the STHAA’s country-by-country reporting provisions (Sec. 201), requiring companies registered with the U.S. Securities and Exchange Commission (SEC) to disclose their employee levels, sales, profits, and tax payments on a country-by-country basis.
“As recent hearings and articles exposing the profit shifting practices of Apple, Starbucks, and Google highlight, it is now common in international business for companies to artificially shift their profits out of the nations in which they were generated and into tax havens. Such behavior starves governments of much needed tax revenue at a time when rich and poor nations alike are struggling to make ends meet. Requiring companies to disclose where they are operating, where they are making their profits, and where they are paying taxes is a straightforward way to detect and deter corporate tax dodging,” said Ms. Lowe.
In April, the European Union adopted requirements that all financial institutions disclose profits made, taxes paid, subsidiaries, and staff levels on a country-by-country basis, and EU leaders announced in May that they were considering requiring all multinational companies to do the same.
“Global momentum is clearly moving toward requiring multinationals to publicly report information on a country-by-country basis, and the public has been demanding it. Now is the time for the United States to fully embrace public country-by-country reporting for multinationals,” added Ms. Lowe.
Rep. Lloyd Doggett (D-TX) introduced a counterpart to the Stop Tax Haven Abuse Act in the U.S. House of Representatives in April.
Notes to Editors:
- Click here to read an HTML version of this release on our website.
- Click here to read the press release from Sen. Carl Levin on the Stop Tax Haven Abuse Act.
- Click here to read a summary of the legislation on Sen. Carl Levin’s website.
- Click here to download a PDF of the full bill text from Sen. Levin’s website.
- While the bill is projected to generate $220 billion in revenue over ten years (or $22 billion per year) for the U.S. government, broader tax haven abuses are estimated to cost the U.S. Treasury roughly $150 billion each year.
+1 202-293-0740 ext.222
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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 as a means to global development.
For additional information please visit www.gfintegrity.org.