International investors push for tax transparency law
May 21, 2021
Investors managing $2.9 trillion worth of assets have written to US congressional leaders calling on them to back a new law to improve tax transparency.
The 66 institutional investors are members of the Financial Accountability and Corporate Transparency (FACT) Coalition, and called on US politicians to support the Disclosure of Tax Havens and Offshoring Act currently being considered by Congress.
The act would require US companies to disclose the income, assets and tax jurisdictions of all their multinational operations and subsidiaries.
The letter has been sent to the chair and ranking members of the Senate Committee on Banking, Housing, and Urban Affairs, and to their equivalents on the House Committee on Financial Services.
Urging support for the Act, the letter states: “The legislation would require much-needed disclosures of material information to better allow investors to gauge risks and assess value, strengthen the current state of opaque tax reporting by corporations, and meet emerging global country-by-country reporting standards.”
Country-by-country tax reporting has been agreed by the Organization for Economic Co-operation and Development (OECD) and is also recommended by the United Nations’ Principles for Responsible Investment.
The FACT Coalition’s letter argues that, since US multinationals already provide country-by-country information to the US Internal Revenue Service under the OECD agreement, making the same information available to investors would not be a significant burden on business.
The FACT Coalition is an international alliance of more than 100 organisations that campaign on tax and corporate transparency.
The signatories to the letter represent FACT’s leading institutional investors, including unions, public sector bodies such as the New York City Comptroller’s Office and the UK’s Local Authority Pension Fund Forum, the Church of England Pension Board, and private sector investment firms.
The coalition’s letter is available to read on the organisation’s website.Last Updated: 21 May 2021