Van Hollen, Axne, and Doggett Lead Bicameral Letter Urging the OECD to Require More Transparent Tax Reporting

Statement

Today, U.S. Senator Chris Van Hollen (D-Md.) and Representatives Cindy Axne (D-Iowa) and Lloyd Doggett (D-Tex.) led a letter signed by 33 Senators and Representatives to the Organisation for Economic Co-operation and Development (OECD), urging the organization to strengthen country-by-country reporting rules during their upcoming review of current standards and to require corporations to publicly disclose these country-by-country reports. As the members note in their letter, improved country-by-country reporting data is a crucial first step to ensuring large corporations pay their fair share of taxes. In addition to the letter, Senator Van Hollen and Representative Axne have introduced legislation that would require large U.S. multinational corporations to publicly disclose the country-by-country financial and tax information that they already report on a confidential basis to the IRS under the current OECD framework.

The Members write, "Thank you for the opportunity to comment on the OECD country-by-country reporting rules as part of your review process. As Members of Congress, we are focused on making the tax system fairer for working families by ensuring that multinational corporations are paying their fair share. The OECD country-by-country reports are an important first step, and we encourage you to build on this progress by strengthening the standards for country-by-country reporting and requiring public disclosure of these reports."

They continue, "Large multinational corporations use a variety of accounting maneuvers to shift profits into tax haven countries to avoid taxes in countries like the United States where they operate. Country-by-country reports from individual corporations are not currently public, but the Internal Revenue Service has published alarming figures on tax haven abuse by aggregating the data it receives in these reports. For example, U.S. corporations booked $32 billion of profits in Bermuda in 2017, despite having only 547 employees there.

The Members go on to highlight the importance of this reporting, noting, "Public country-by-country reports would show which corporations are booking profits in tax havens, and better inform future policy changes regarding international corporate taxation."

They close the letter, stating, "We are pleased to see the OECD considering a lower threshold for requiring multinational corporations to report country-by-country information. A more complete picture of multinational corporate finances would improve tax administration and enforcement, especially with regard to developing countries with fewer very large corporations."

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