Legislators introduce bill to shed more light on US multinationals
September 22nd, 2016
September 22nd, 2016
Bill would help investors, lawmakers and the public make sense of how U.S. companies are operating around the globe
WASHINGTON, D.C.—Representative Pocan (D-WI), with Representatives Jan Schakowsky (D-IL), Lloyd Doggett (D-TX), and Gwen Moore (D-WI), have introduced a bill in the United States House of Representatives that seeks to unpack the opacity surrounding corporate disclosure requirements. Though U.S. companies already provide information on things like taxes paid, number of employees, and revenue generated, it’s done on an aggregate basis globally, making it difficult for investors, legislators and the public to get a real picture of how they are operating in a particular country.
“Having this information available at a country-level is instrumental for investors to make sound business decisions, for policymakers to create better laws, and for the public to have an improved understanding of where and how a company contributes to the tax base,” said Porter McConnell, Director of the Financial Transparency Coalition.
The bill would require U.S. companies that file annual or quarterly reports to the Securities and Exchange Commission to provide a disaggregated breakdown of basic financial information on a country-by-country basis.
“From the LuxLeaks scandal to recent revelations around Apple, we’ve seen what happens when there is a lack of transparency in the operations of large multinational corporations,” said Henri Makkonen, FTC’s EU Advocacy Advisor. “Requiring a simple breakdown of how and where companies do business would provide much needed context for investors and shareholders who want to make sound and responsible investments.”
Increased corporate transparency could also benefit countries in the Global South, where some multinational corporations have been accused of bending tax treaties and taking advantage of lax disclosure requirements to avoid paying taxes where they are needed most. With this sort of information disaggregated, spotting suspicious arrangements will only get easier.