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US Senators Push For Public CbC Reporting Requirement

by Mike Godfrey, Tax-News.com, Washington

08 June 2016


US Senator Bernard Sanders and three of his colleagues have urged the Government to further strengthen the proposed country-by-country (CbC) reporting regulations by providing public access to the reported data.

In a letter submitted to US Treasury Secretary Jacob Lew and US Internal Revenue Service Commissioner John Koskinen on June 7, 2016, the senators said that CbC reporting "will provide tax authorities with new insight into the strategies and high-risk activities of some multinational entities, and therefore we believe CbC reporting is appropriate and should be implemented promptly. However, while we appreciate the proposed rule, we urge to you to take further steps to provide public disclosure of the reported data, which would align the US with the European Commission's recent proposal on this matter."

They pointed out: "While appropriate measures should be implemented to avoid the disclosure of certain sensitive business information, in general, there is little reason that a company should not be able to publicly disclose information such as profits, number of employees, and taxes paid in various countries. In Europe, banks have already been required to provide similar data, and in the US, public companies already provide some disclosures of regional information in their securities filings. For those reasons, we believe that public CbC reporting would be beneficial for policymakers and the public as they consider tax reform or other changes to our nation's tax policies."

On December 23, 2015, the IRS issued draft regulations (REG– 109822–15) proposing annual CbC reporting by US persons that are the ultimate parent entity of a MNE group that has annual revenue for the preceding annual accounting period of USD850m or more. A public hearing on proposed regulations was held on May 13, 2016, in the IRS Auditorium in Washington DC.

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