Disclosure of Tax Havens and Offshoring Act

I 116TH CONGRESS 2D SESSION H. R. 5933 To amend the Securities Act of 1934 to require country-by-country reporting. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 21, 2020 Mrs. AXNE (for herself, Mr. DOGGETT, Ms. WEXTON, and Mr. LYNCH) intro- duced the following bill; which was referred to the Committee on Finan- cial Services A BILL To amend the Securities Act of 1934 to require country- by-country reporting. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Disclosure of Tax Ha- 4 vens and Offshoring Act’’. 5 SEC. 2. COUNTRY-BY-COUNTRY REPORTING. 6 (a) COUNTRY-BY-COUNTRY REPORTING.—Section 13 7 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) 8 is amended by adding at the end the following new sub- 9 section: 10 VerDate Sep 11 2014 01:25 Feb 22, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5933.IH H5933 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 5933 IH ‘‘(s) DISCLOSURE OF FINANCIAL PERFORMANCE ON 1 A COUNTRY-BY-COUNTRY BASIS.— 2 ‘‘(1) DEFINITIONS.—In this subsection— 3 ‘‘(A) the term ‘constituent entity’ means, 4 with respect to a covered issuer, any separate 5 business entity of the covered issuer; 6 ‘‘(B) the term ‘covered issuer’ means an 7 issuer who— 8 ‘‘(i) is a member of a multinational 9 enterprise group; and 10 ‘‘(ii) the multinational enterprise 11 group of which the issuer is a member has 12 annual revenue for the preceding calendar 13 year of not less than an amount deter- 14 mined by the Commission to conform to 15 United States or international standards 16 for country-by-country reporting; and 17 ‘‘(C) the term ‘tax jurisdiction’— 18 ‘‘(i) means a country or a jurisdiction 19 that is not a country but that has fiscal 20 autonomy; and 21 ‘‘(ii) includes a territory or possession 22 of the United States that has fiscal auton- 23 omy. 24 ‘‘(2) DISCLOSURE.— 25 VerDate Sep 11 2014 01:25 Feb 22, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5933.IH H5933 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 5933 IH ‘‘(A) IN GENERAL.—Each covered issuer 1 shall file a report with the Commission that in- 2 cludes information described in subparagraph 3 (B), and any other information required by the 4 Commission, with respect to the reporting pe- 5 riod described in subparagraph (C). 6 ‘‘(B) INFORMATION REQUIRED.—The in- 7 formation described in this subparagraph is as 8 follows: 9 ‘‘(i) CONSTITUENT ENTITY INFORMA- 10 TION.—Information on the constituent en- 11 tity, including the following: 12 ‘‘(I) The complete legal name of 13 the constituent entity. 14 ‘‘(II) The tax jurisdiction, if any, 15 in which the constituent entity is resi- 16 dent for tax purposes. 17 ‘‘(III) The tax jurisdiction in 18 which the constituent entity is orga- 19 nized or incorporated (if different 20 from the tax jurisdiction of residence). 21 ‘‘(IV) The tax identification num- 22 ber, if any, used for the constituent 23 entity by the tax administration of the 24 VerDate Sep 11 2014 01:25 Feb 22, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5933.IH H5933 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 5933 IH constituent entity’s tax jurisdiction of 1 residence. 2 ‘‘(V) The main business activity 3 or activities of the constituent entity. 4 ‘‘(ii) TAX JURISDICTION.—Informa- 5 tion on each tax jurisdiction in which one 6 or more constituent entities is resident, 7 presented as an aggregated or consolidated 8 form of the information for the constituent 9 entities resident in each tax jurisdiction, 10 including the following: 11 ‘‘(I) Revenues generated from 12 transactions with other constituent 13 entities. 14 ‘‘(II) Revenues not generated 15 from transactions with other con- 16 stituent entities. 17 ‘‘(III) Profit or loss before in- 18 come tax. 19 ‘‘(IV) Total income tax paid on a 20 cash basis to all tax jurisdictions. 21 ‘‘(V) Total accrued tax expense 22 recorded on taxable profits or losses. 23 ‘‘(VI) Stated capital. 24 VerDate Sep 11 2014 01:25 Feb 22, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5933.IH H5933 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 5933 IH ‘‘(VII) Total accumulated earn- 1 ings. 2 ‘‘(VIII) Total number of employ- 3 ees on a full-time equivalent basis. 4 ‘‘(IX) Net book value of tangible 5 assets, which, for purposes of this sec- 6 tion, does not include cash or cash 7 equivalents, intangibles, or financial 8 assets. 9 ‘‘(iii) SPECIAL RULES.—The informa- 10 tion listed in clause (ii) shall be provided, 11 in aggregated or consolidated form, for any 12 constituent entity or entities that have no 13 tax jurisdiction of residence. In addition, if 14 a constituent entity is an owner of a con- 15 stituent entity that does not have a juris- 16 diction of tax residence, then the owner’s 17 share of such entity’s revenues and profits 18 will be aggregated or consolidated with the 19 information for the owner’s tax jurisdiction 20 of residence. 21 ‘‘(C) REPORTING PERIOD.—The reporting 22 period covered by this paragraph is the period 23 of the covered entity’s applicable financial state- 24 ment prepared for the 12-month period that 25 VerDate Sep 11 2014 01:25 Feb 22, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5933.IH H5933 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 5933 IH ends with or within the taxable year of the cov- 1 ered issuer. If the covered issuer does not pre- 2 pare an annual applicable financial statement, 3 then the reporting period covered by this para- 4 graph is the 12-month period that ends on the 5 last day of the taxable year of the covered 6 issuer. 7 ‘‘(D) FILING DEADLINE.—Each covered 8 issuer shall submit to the Commission a report 9 required under this section on or before the due 10 date (including extensions) for filing that cov- 11 ered issuer’s tax return in the tax jurisdiction 12 in which the covered issuer’s multinational en- 13 terprise group is resident. 14 ‘‘(E) REGULATION.—The Commission 15 shall promulgate regulations carrying out this 16 section that conform to United States or inter- 17 national standards for country-by-country re- 18 porting, including regulations promulgated by 19 the Internal Revenue Service.’’. 20 (b) RULEMAKING.— 21 (1) DEADLINES.—The Securities and Exchange 22 Commission (in this section referred to as the ‘‘Com- 23 mission’’) shall— 24 VerDate Sep 11 2014 01:25 Feb 22, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5933.IH H5933 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 5933 IH (A) not later than 270 days after the date 1 of enactment of this Act, issue a proposed rule 2 to carry out this section and the amendment 3 made by this section; and 4 (B) not later than 1 year after the date of 5 enactment of this Act, issue a final rule to 6 carry out this section and the amendment made 7 by this section. 8 (2) DATA FORMAT.—The information required 9 to be provided by this section shall be provided by 10 the issuer in a report in a machine readable format 11 prescribed by the Commission, and such report shall 12 be made available to the public online, in such ma- 13 chine readable format as the Commission shall pre- 14 scribe. 15 (3) EFFECTIVE DATE.—Subsection (s) of sec- 16 tion 13 of the Securities Exchange Act of 1934, as 17 added by this section, shall become effective 1 year 18 after the date on which the Commission issues a 19 final rule under this section. 20 Æ VerDate Sep 11 2014 01:25 Feb 22, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H5933.IH H5933 pamtmann on DSKBC07HB2PROD with BILLS