Eight USA Senators, including prominent Democrat figures Elizabeth Warren and Bernard Sanders, have sent a letter to the Financial Accounting Standards Board (FASB), urging the USA standards setter to require multinationals to disclose their financial information including taxes paid on a country-by-country (CbCR) basis.
“Recent estimates show that U.S. companies currently hold more than $2.6 trillion offshore, with significant holdings in tax haven jurisdictions. Country by country disclosure is important for policymakers and the general public, as the information will be useful in examining economic trends and addressing public policy issues,” the letter read.
As Congress considers potential tax reform legislation, many Americans want to know how tax changes will affect large companies with significant assets held overseas, the letter continued. “Further, investors want this information, as they could face significant changes in the value of their investments if changes in international tax enforcement practices or tax rules affect companies they have invested in.”
This letter for USA senator follows similar letters to FASB sent in July by the members of the USA House of Representatives and members of the SEC’s Investor Advisory Committee (IAC).
The eight Senators' letter like the letter by the members of the House of Representatives advocated for public disclosure of such information, members of the IAC were more conscious and suggested that disclosure should be required only if relevant and material.
“We appreciate the input and interest from members of Congress on this important issue. Last year, the FASB issued proposed improvements to tax disclosures as part of a broader disclosure framework project,” a FASB spokesperson said. “We received approximately 50 comment letters in response to that proposal, and conducted extensive outreach including a roundtable earlier this year. We will carefully consider the Senators’ comments as we redeliberate on all of the input we have received prior to determining next steps.”
FASB’s exposure draft which considered expanding public disclosures around income taxes was issued for public comment in July 2016 and the comment period officially closed on 30 September 2016. However a spokesperson for FASB told this magazine in July of this year that the USA standards setter considered comment letters no matter when they’re received.
This magazine understand that the Board met on October 4 to discuss stakeholder feedback received on the Board’s decision process portion of the project. Continued deliberations are planned for the coming month.
The Senator’s letter can be found here