Financial Transparency Coalition

Over the past few years, there’s been a great deal of movement on the issue of country by country reporting (CBCR) for multinational corporations (MNCs). The G20 and OECD have developed new reporting requirements as part of their Base Erosion and Profit Shifting (BEPS) initiative, and the European Parliament has gone even further, calling for country-by-country reports to be made public. Increasingly, we’ve seen businesses and members of the investor community calling for enhanced transparency; CEOs have recently shown their willingness to accept public CBCR. But some in the U.S. Congress don’t seem to see the direction of the tide, as evidenced by a recent article in The Washington Post’s online edition. 

While we don’t agree with the stance of Sen. Orrin Hatch (R-Utah) and Rep. Paul Ryan (R-Wisc.), who are calling on the U.S. to resist G20 plans for corporate tax transparency, we were also a bit confused by the tone of the article, which seemed better suited for the editorial pages. We decided to write a Letter to the Editor (LTE) to alert the paper to our concerns, but it seems, despite the news industry’s embracing of online content, letters to the editor remain a bit behind the times. We were told by the Post that LTEs can only be submitted for articles that appear in the print edition.

So, in lieu of an LTE, we decided to do the next best thing and post our response here:

Dear Editor:

The Aug. 27 article “Hatch and Ryan press Treasury to back off on international tax plan” had a clear agenda to cast country by country reporting as onerous red tape that’s universally opposed by the business community. The reality is that country by country reporting (CBCR), which would help ensure that corporations pay taxes where their economic activity occurs, is a common sense initiative that is gaining support. The measure is already being implemented for financial institutions in the European Union.

There is little evidence of unified opposition from the business community. A 2014 survey from PricewaterhouseCoopers showed that 59% of global CEOs would not be opposed to public CBCR for their companies. Just this week, a survey of FTSE100 companies released by UK charity ChristianAid revealed that only 15% of companies contacted actually oppose legislation to implement public CBCR for all industries.

To characterize common sense oversight of corporate operations as a “niche tax issue” that would “create a headache for big companies that do business overseas” is journalistic overreach, and would be more appropriate to the editorial page. Country by country reporting is gaining acceptance from business and investment communities worldwide, who are beginning to see it as part of an inevitable future they can live with, not the doomsday it’s been branded as in the past.