By Bill Flook
A House Democrat is introducing legislation that would require large companies to make new country-by-country disclosures on employees, revenue, tax payments and other information.
Rep. Cindy Axne of Iowa and three Democratic cosponsors are slated to introduce the Disclosure of Tax Havens and Offshoring Act. A group of Senate Democrats led by Sen. Chris Van Hollen of Maryland introduced a companion bill (S. 1609) in May 2019.
The bill would amend the Securities Exchange Act of 1934 to require corporations with more than $850 million in annual revenue to report country-specific data to the SEC that includes profits, taxes, employees, and tangible assets. The information is already reported annually to the IRS.
Axne, in a statement, said shining a light on the use of corporate tax havens “will help investors and the public understand the risks that public corporations are taking to try and squeeze out extra profits.”
The American Federation of State, County and Municipal Employees (AFSCME), Institute for Taxation and Economy Policy, and the Financial Accountability and Corporate Transparency (FACT) Coalition are all supporting the bill, according to a news release.
The bill is part of a wider push by Axne to force large corporations to disclose more information about both their offshoring practices and tax strategies.
In October 2019, the House passed a separate Axne bill, H.R. 3624, the Outsourcing Accountability Act of 2019, on a 226-184 vote.
The measure would apply both to companies and their consolidated subsidiaries. Under the bill, companies would need to provide a state-by-state breakdown of their domestic workers, as well as a country-by-country breakdown of their foreign workers. Today, under Item 101 in Regulation S-K, an issuer need only disclose their total employee headcount.
This article originally appeared in the February 21, 2020 edition of Accounting & Compliance Alert, available on Checkpoint.
Subscribe to our Checkpoint Daily Newsstand email to get all the latest tax, accounting, and audit news delivered to your inbox each weekday. It’s free!
