The US House of Representatives passed a new law that could make multinational corporate taxes much more transparent and put tax avoidance tactics in the spotlight.
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 law – if passed – could provide a “spotlight” on corporate profit shifting and tax avoidance strategies.
“We call on the Senate to accelerate this important transparency measure after it is swiftly passed in the House of Representatives. It is no longer time for corporate tax avoidance tactics to emerge from the shadows,” said Erica Hanichak, director of government affairs at FACT- Coalition.
The Tax Haven and Offshoring Disclosure Act was also introduced in the Senate, with Senator Chris Van Hollen leading the indictment in that chamber.
Large companies are regularly accused of using various strategies and loopholes to evade taxes. In 2013, the Senate accused Apple of setting up offshore subsidiaries to avoid paying billions in US taxes. In 2019, Germany’s finance minister said Apple and other companies are escaping much of their fair tax burden.
In early June, the G7 group agreed to close various tax loopholes that were encouraging multinational corporations to move money across borders. The most important change by the G7 is a global minimum corporate tax rate.
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