The U.S. House of Representatives has passed a new piece of legislation that could make multinational corporate taxes much more transparent and shine a “spotlight” on tax avoidance tactics.
In its current form, the Disclosure of Tax Havens and Offshoring Act would require large corporations registered with the SEC to disclose taxes paid and other financial information about their operations and subsidiaries on a country-by-country basis.
According to the Financial Accountability and Corporate Transparency (FACT) Coalition, the act — if passed — could provide a “spotlight” on corporate profit shifting and tax avoidance strategies.
“We urge the Senate to expedite this important transparency measure after its quick passage in the House. It’s far past time for corporate tax avoidance tactics to come out of the shadows,” said Erica Hanichak, the FACT Coalition’s director of government affairs.
The Disclosure of Tax Havens and Offshoring Act has also been introduced in the Senate, with Sen. Chris Van Hollen leading the charge in that chamber.
Large companies are regularly accused of skirting taxes using various strategies and loopholes. In 2013, the Senate accused Apple of creating offshore subsidiaries to avoid paying billions in U.S. taxes. In 2019, Germany’s finance minister said that Apple and other companies are escaping much of their fair tax burden.
Earlier in June, the G7 group of nations agreed to close various tax loopholes that encouraged multinational corporations to move money across borders. The chief change introduced by the G7 is a global minimum corporate tax rate.
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