Disclosure of Tax Havens and Offshoring Act

IB Union Calendar No. 35 117TH CONGRESS 1ST SESSION H. R. 3007 [Report No. 117–52] To amend the Securities Act of 1934 to require country-by-country reporting. IN THE HOUSE OF REPRESENTATIVES MAY 7, 2021 Mrs. AXNE (for herself, Mr. SHERMAN, Ms. WEXTON, Mr. LYNCH, Ms. NOR- TON, Mr. COOPER, Mr. GRIJALVA, and Mr. GARCI´A of Illinois) introduced the following bill; which was referred to the Committee on Financial Serv- ices JUNE 8, 2021 Additional sponsors: Mr. BEYER and Ms. OMAR JUNE 8, 2021 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic] [For text of introduced bill, see copy of bill as introduced on May 7, 2021] VerDate Sep 11 2014 21:15 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H3007.RH H3007 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 3007 RH A BILL To amend the Securities Act of 1934 to require country- by-country reporting. VerDate Sep 11 2014 21:15 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H3007.RH H3007 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 3007 RH 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 of 7 the Securities Exchange Act of 1934 (15 U.S.C. 78m) is 8 amended by adding at the end the following new subsection: 9 ‘‘(s) DISCLOSURE OF FINANCIAL PERFORMANCE ON A 10 COUNTRY-BY-COUNTRY BASIS.— 11 ‘‘(1) DEFINITIONS.—In this subsection— 12 ‘‘(A) the term ‘constituent entity’ means, 13 with respect to a covered issuer, any separate 14 business entity of the covered issuer; 15 ‘‘(B) the term ‘covered issuer’ means an 16 issuer who— 17 ‘‘(i) is a member of a multinational 18 enterprise group; and 19 ‘‘(ii) the multinational enterprise 20 group of which the issuer is a member has 21 annual revenue for the preceding calendar 22 year of not less than an amount determined 23 by the Commission to conform to United 24 VerDate Sep 11 2014 21:15 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H3007.RH H3007 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 3007 RH States or international standards for coun- 1 try-by-country reporting; and 2 ‘‘(C) the term ‘tax jurisdiction’— 3 ‘‘(i) means a country or a jurisdiction 4 that is not a country but that has fiscal au- 5 tonomy; and 6 ‘‘(ii) includes a territory or possession 7 of the United States that has fiscal auton- 8 omy. 9 ‘‘(2) DISCLOSURE.— 10 ‘‘(A) IN GENERAL.—Each covered issuer 11 shall file a report with the Commission that in- 12 cludes information described in subparagraph 13 (B), and any other information required by the 14 Commission, with respect to the reporting period 15 described in subparagraph (C). 16 ‘‘(B) INFORMATION REQUIRED.—The infor- 17 mation described in this subparagraph is as fol- 18 lows: 19 ‘‘(i) CONSTITUENT ENTITY INFORMA- 20 TION.—Information on the constituent enti- 21 ty, including the following: 22 ‘‘(I) The complete legal name of 23 the constituent entity. 24 VerDate Sep 11 2014 21:15 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H3007.RH H3007 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 3007 RH ‘‘(II) The tax jurisdiction, if any, 1 in which the constituent entity is resi- 2 dent for tax purposes. 3 ‘‘(III) The tax jurisdiction in 4 which the constituent entity is orga- 5 nized or incorporated (if different from 6 the tax jurisdiction of residence). 7 ‘‘(IV) The tax identification num- 8 ber, if any, used for the constituent en- 9 tity by the tax administration of the 10 constituent entity’s tax jurisdiction of 11 residence. 12 ‘‘(V) The main business activity 13 or activities of the constituent entity. 14 ‘‘(ii) TAX JURISDICTION.—Information 15 on each tax jurisdiction in which one or 16 more constituent entities is resident, pre- 17 sented as an aggregated or consolidated 18 form of the information for the constituent 19 entities resident in each tax jurisdiction, in- 20 cluding the following: 21 ‘‘(I) Revenues generated from 22 transactions with other constituent en- 23 tities. 24 VerDate Sep 11 2014 21:15 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H3007.RH H3007 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 3007 RH ‘‘(II) Revenues not generated from 1 transactions with other constituent en- 2 tities. 3 ‘‘(III) Profit or loss before income 4 tax. 5 ‘‘(IV) Total income tax paid on a 6 cash basis to all tax jurisdictions. 7 ‘‘(V) Total accrued tax expense re- 8 corded on taxable profits or losses. 9 ‘‘(VI) Stated capital. 10 ‘‘(VII) Total accumulated earn- 11 ings. 12 ‘‘(VIII) Total number of employ- 13 ees on a full-time equivalent basis. 14 ‘‘(IX) Net book value of tangible 15 assets, which, for purposes of this sec- 16 tion, does not include cash or cash 17 equivalents, intangibles, or financial 18 assets. 19 ‘‘(iii) SPECIAL RULES.—The informa- 20 tion listed in clause (ii) shall be provided, 21 in aggregated or consolidated form, for any 22 constituent entity or entities that have no 23 tax jurisdiction of residence. In addition, if 24 a constituent entity is an owner of a con- 25 VerDate Sep 11 2014 21:15 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H3007.RH H3007 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 3007 RH stituent entity that does not have a jurisdic- 1 tion of tax residence, then the owner’s share 2 of such entity’s revenues and profits will be 3 aggregated or consolidated with the infor- 4 mation for the owner’s tax jurisdiction of 5 residence. 6 ‘‘(C) REPORTING PERIOD.—The reporting 7 period covered by this paragraph is the period of 8 the covered entity’s applicable financial state- 9 ment prepared for the 12-month period that ends 10 with or within the taxable year of the covered 11 issuer. If the covered issuer does not prepare an 12 annual applicable financial statement, then the 13 reporting period covered by this paragraph is the 14 12-month period that ends on the last day of the 15 taxable year of the covered issuer. 16 ‘‘(D) FILING DEADLINE.—Each covered 17 issuer shall submit to the Commission a report 18 required under this section on or before the due 19 date (including extensions) for filing that covered 20 issuer’s tax return in the tax jurisdiction in 21 which the covered issuer’s multinational enter- 22 prise group is resident. 23 ‘‘(E) REGULATION.—The Commission shall, 24 in consultation with the Commissioner of the In- 25 VerDate Sep 11 2014 21:15 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H3007.RH H3007 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 3007 RH ternal Revenue Service and Secretary of the 1 Treasury— 2 ‘‘(i) promulgate regulations carrying 3 out this subsection that conform to United 4 States or international standards for coun- 5 try-by-country reporting, including regula- 6 tions promulgated by the Internal Revenue 7 Service; and 8 ‘‘(ii) require disclosure of the account- 9 ing methods used in calculating the infor- 10 mation contained in each report filed pur- 11 suant to this subsection.’’. 12 (b) RULEMAKING.— 13 (1) DEADLINES.—The Securities and Exchange 14 Commission (in this section referred to as the ‘‘Com- 15 mission’’) shall— 16 (A) not later than 1 year after the date of 17 enactment of this Act, issue a proposed rule to 18 carry out this section and the amendment made 19 by this section; and 20 (B) not later than 18 months after the date 21 of enactment of this Act, issue a final rule to 22 carry out this section and the amendment made 23 by this section. 24 VerDate Sep 11 2014 21:15 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\H3007.RH H3007 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 3007 RH (2) DATA FORMAT.—The information required to 1 be provided by this section shall be provided by the 2 issuer in a report in a machine readable format pre- 3 scribed by the Commission, and such report shall be 4 made available to the public online, in such machine 5 readable format as the Commission shall prescribe. 6 (3) EFFECTIVE DATE.—Subsection (s) of section 7 13 of the Securities Exchange Act of 1934, as added 8 by this section, shall become effective 1 year after the 9 date on which the Commission issues a final rule 10 under this section. 11 VerDate Sep 11 2014 21:15 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H3007.RH H3007 pamtmann on DSKBC07HB2PROD with BILLS Union Calendar No. 35 117TH CONGRESS 1ST SESSION H. R. 3007 [Report No. 117–52] A BILL To amend the Securities Act of 1934 to require country-by-country reporting. JUNE 8, 2021 Reported with an amendment, committed to the Com- mittee of the Whole House on the State of the Union, and ordered to be printed VerDate Sep 11 2014 21:15 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6651 Sfmt 6651 E:\BILLS\H3007.RH H3007 pamtmann on DSKBC07HB2PROD with BILLS