Disclosure of Tax Havens and Offshoring Act
- Sponsor
- Rep. Pettersen, Brittany [D-CO-7]
- Committees
- Financial Services Committee (primary)
- Last action
- Jul 16, 2026
Bottom line
This bill mandates public country-by-country financial reporting for large multinational corporations to increase transparency regarding their global tax practices and economic activities.
What it actually does
This bill amends the Securities Exchange Act of 1934 to mandate that publicly traded multinational corporations, defined as 'covered issuers,' submit detailed country-by-country reports to the Securities and Exchange Commission (SEC). These reports must include financial information such as revenues, profits, taxes paid, and employee counts for each tax jurisdiction where the corporation operates, and the SEC is required to make this data publicly available in a machine-readable format.
Proponents argue
Proponents argue that this bill will enhance corporate transparency, help combat tax avoidance by shedding light on profit shifting to low-tax jurisdictions, and provide investors and the public with crucial information to assess a company's true economic footprint and tax contributions globally. They contend it will level the playing field for domestic businesses and ensure multinational corporations pay their fair share.
Opponents contend
Opponents may argue that such detailed public disclosure could impose significant compliance burdens and costs on businesses, potentially revealing proprietary business strategies to competitors. They might also contend that the aggregated data could be misinterpreted by the public, leading to unfair accusations of tax avoidance, and that existing international standards or private reporting mechanisms are sufficient.
The bill is short and relatively straightforward, allowing for a quick and informed read.
Section 2(a), adding new subsection 13(t) to the Securities Exchange Act of 1934.
Mandate for Public Country-by-Country Reporting
This provision amends the Securities Exchange Act of 1934 to require certain large multinational corporations, defined as 'covered issuers,' to publicly disclose detailed financial and tax information for each country or tax jurisdiction where they operate. The reports will include data on revenues, profits, taxes paid, employee numbers, and tangible assets, aiming to increase transparency on global corporate activities.
Supporters argue
Supporters argue this provision is crucial for combating corporate tax avoidance and profit shifting, ensuring that multinational corporations contribute fairly to the economies where they generate profits. They believe it empowers investors and the public with essential information to make informed decisions and hold companies accountable.
Critics contend
Opponents may contend that mandating public country-by-country reporting creates an undue regulatory burden and significant compliance costs for businesses. They might also argue that such granular data could be misused by competitors or misconstrued by the public, potentially harming a company's competitive position without effectively addressing tax avoidance.
Tradeoffs
The provision balances the public interest in corporate transparency and tax fairness against concerns about increased compliance costs for businesses and the potential for disclosure of proprietary information.
Section 2(a), adding new subsection 13(t)(1) to the Securities Exchange Act of 1934.
Defining 'Covered Issuer' and 'Tax Jurisdiction'
This section defines key terms for the reporting requirement. A 'covered issuer' is an issuer that is part of a multinational enterprise group with annual revenue above a threshold set by the SEC, conforming to United States or international standards. A 'tax jurisdiction' includes non-country jurisdictions with fiscal autonomy, such as U.S. territories or possessions.
Section 2(a), adding new subsection 13(t)(2)(B) to the Securities Exchange Act of 1934.
Detailed Financial and Entity Information Requirements
This provision specifies the exact data points that must be included in the country-by-country reports. It requires information on each constituent entity (legal name, tax residence, organization jurisdiction, tax ID, main business activity) and aggregated financial data for each tax jurisdiction (revenues, profit/loss, taxes paid/accrued, capital, earnings, employees, tangible assets). Special rules are included for entities without a tax jurisdiction of residence.
Section 2(b)
SEC Rulemaking and Effective Date
This section sets deadlines for the Securities and Exchange Commission (SEC) to issue a proposed rule within 270 days and a final rule within one year of the Act's enactment. It also mandates that the reported information be in a machine-readable format and publicly available online. The reporting requirements themselves will take effect one year after the SEC issues its final rule.
The bill delegates to the Securities and Exchange Commission (SEC) the authority to determine the specific annual revenue threshold that defines a 'covered issuer' (i.e., which multinational enterprise groups are subject to the reporting requirements). This threshold must conform to existing U.S. or international standards for country-by-country reporting.
Section 2(a), adding new subsection 13(t)(1)(B)
Why it matters:This is standard legislative practice to allow regulatory agencies flexibility in setting technical parameters that may need to adapt to evolving international norms or economic conditions, rather than locking a specific figure into statute.
Case for: Supporters argue that delegating this to the SEC allows for expert determination of the appropriate threshold, ensuring it aligns with current best practices (like OECD standards) and can be updated without new legislation. This flexibility is crucial for maintaining relevance in a dynamic global financial landscape.
Case against: Critics might argue that leaving the threshold undefined in the statute creates uncertainty for businesses and gives significant power to an unelected body to determine the scope of a major reporting mandate. They might prefer a specific, legislated threshold for greater predictability and democratic accountability.
Estimated impact: The specific revenue threshold set by the SEC will directly determine the number and size of multinational corporations subject to these new reporting requirements, significantly impacting the scope of transparency and compliance costs.