Legislative update: Proposal to require country-by-country reporting of pre-tax profits, taxes paid

H.R. 3007, the “Disclosure of Tax Havens and Offshoring Act”

H.R. 3007, the “Disclosure of Tax Havens and Offshoring Act”

The Financial Services Committee of the U.S. House of Representatives this evening reported out (approved) H.R. 3007, the “Disclosure of Tax Havens and Offshoring Act”—a bill that would require public companies to disclose certain financial information on a country-by-country (CbC) basis, including “total income tax paid on a cash basis to all tax jurisdictions.”  

The committee vote was 28 to 23.

The bill would amend the Securities Act of 1934 to require CbC reporting and also to require companies to disclose a number of specific tax-related items for each of its subsidiaries, as well as on a consolidated basis, such as total accrued tax expenses, stated capital, and total accumulated earnings. The proposed effective date for the CbC measures would be one year from the date on which the Securities and Exchange Commission adopts a final rule implementing the CbC provision.

Read text of the bill [PDF 45 KB] and of an amendment [PDF 39 KB]

A release [PDF 283 KB] from the Financial Services Committee notes that currently there is no requirement for public companies to disclose their tax liabilities or the domestic or foreign governments to which they are owed or paid.

What’s next?

Now that the bill has been reported out of committee, the next step in the legislative process would be consideration by the full House of Representatives. Following this, the bill would have to be considered and passed by the Senate and then signed by the president to become law.

KPMG observation

Currently pending in the European Union is a proposal for public CbC reporting. Read TaxNewsFlash

 

 

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