Disclosure of Tax Havens and Offshoring Act

Subjects: Finance and Financial Sector


<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 638 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                 S. 638

   To amend the Securities Act of 1934 to require country-by-country 
                               reporting.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 2, 2023

 Mr. Van Hollen (for himself, Mr. Durbin, Mr. Sanders, Mr. Whitehouse, 
 Ms. Smith, Ms. Klobuchar, Mr. Casey, Mr. Blumenthal, Ms. Baldwin, Ms. 
  Duckworth, and Ms. Warren) introduced the following bill; which was 
read twice and referred to the Committee on Banking, Housing, and Urban 
                                Affairs

_______________________________________________________________________

                                 A BILL


 
   To amend the Securities Act of 1934 to require country-by-country 
                               reporting.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Disclosure of Tax Havens and 
Offshoring Act''.

SEC. 2. COUNTRY-BY-COUNTRY REPORTING.

    (a) Country-by-Country Reporting.--Section 13 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78m) is amended by adding at the end 
the following:
    ``(t) Disclosure of Financial Performance on a Country-by-Country 
Basis.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `constituent entity' means, with 
                respect to a covered issuer, any separate business 
                entity of the covered issuer;
                    ``(B) the term `covered issuer' means an issuer 
                that is a member of a multinational enterprise group 
                that has annual revenue for the preceding calendar year 
                of not less than an amount determined by the Commission 
                to conform to United States or international standards 
                for country-by-country reporting; and
                    ``(C) the term `tax jurisdiction'--
                            ``(i) means a jurisdiction that--
                                    ``(I) is not a country; and
                                    ``(II) has fiscal autonomy; and
                            ``(ii) includes a territory or possession 
                        of the United States that has fiscal autonomy.
            ``(2) Disclosure.--
                    ``(A) In general.--Each covered issuer shall submit 
                to the Commission a report that includes information 
                described in subparagraph (B), and any other 
                information required by the Commission, with respect to 
                the reporting period described in subparagraph (C).
                    ``(B) Information required.--The information 
                described in this subparagraph is as follows:
                            ``(i) Constituent entity information.--
                        Information on the constituent entity, 
                        including the following:
                                    ``(I) The complete legal name of 
                                the constituent entity.
                                    ``(II) The tax jurisdiction, if 
                                any, in which the constituent entity is 
                                resident for tax purposes.
                                    ``(III) The tax jurisdiction in 
                                which the constituent entity is 
                                organized or incorporated (if different 
                                from the tax jurisdiction of 
                                residence).
                                    ``(IV) The tax identification 
                                number, if any, used for the 
                                constituent entity by the tax 
                                administration of the jurisdiction of 
                                residence of the constituent entity.
                                    ``(V) The main business activity or 
                                activities of the constituent entity.
                            ``(ii) Tax jurisdiction.--Information on 
                        each tax jurisdiction in which 1 or more 
                        constituent entities is resident, presented as 
                        an aggregated or consolidated form of the 
                        information for the constituent entities 
                        resident in each tax jurisdiction, including 
                        the following:
                                    ``(I) Revenues generated from 
                                transactions with other constituent 
                                entities.
                                    ``(II) Revenues not generated from 
                                transactions with other constituent 
                                entities.
                                    ``(III) Profit or loss before 
                                income tax.
                                    ``(IV) Total income tax paid on a 
                                cash basis to all tax jurisdictions.
                                    ``(V) Total accrued tax expense 
                                recorded on taxable profits or losses.
                                    ``(VI) Stated capital.
                                    ``(VII) Total accumulated earnings.
                                    ``(VIII) Total number of employees 
                                on a full-time equivalent basis.
                                    ``(IX) Net book value of tangible 
                                assets, not including cash or cash 
                                equivalents, intangibles, or financial 
                                assets.
                            ``(iii) Special rules.--The information 
                        listed in clause (ii) shall be provided, in 
                        aggregated or consolidated form, for any 
                        constituent entity or entities that have no tax 
                        jurisdiction of residence. If a constituent 
                        entity is an owner of a constituent entity that 
                        does not have a jurisdiction of tax residence, 
                        then the share of the owner of the revenues and 
                        profits of the entity shall be aggregated or 
                        consolidated with the information for the tax 
                        jurisdiction of residence of the owner.
                    ``(C) Reporting period.--The reporting period 
                covered by this paragraph is the period of the 
                applicable financial statement of the covered entity 
                prepared for the 12-month period that ends with or 
                within the taxable year of the covered issuer. If the 
                covered issuer does not prepare an annual applicable 
                financial statement, the reporting period covered by 
                this paragraph is the 12-month period that ends on the 
                last day of the taxable year of the covered issuer.
                    ``(D) Filing deadline.--Each covered issuer shall 
                submit to the Commission a report required under this 
                section on or before the due date (including 
                extensions) for filing the tax return of the covered 
                issuer in the tax jurisdiction in which the 
                multinational enterprise group of the covered issuer is 
                resident.
                    ``(E) Regulations.--The Commission shall promulgate 
                regulations carrying out this section that conform to 
                United States or international standards for country-
                by-country reporting, including regulations promulgated 
                by the Internal Revenue Service.''.
    (b) Rulemaking.--
            (1) Deadlines.--The Securities and Exchange Commission (in 
        this section referred to as the ``Commission'') shall--
                    (A) not later than 270 days after the date of 
                enactment of this Act, issue a proposed rule to carry 
                out this section and the amendments made by this 
                section; and
                    (B) not later than 1 year after the date of 
                enactment of this Act, issue a final rule to carry out 
                this section and the amendments made by this section.
            (2) Data format.--The information required to be provided 
        under subsection (t) of section 13 of the Securities Exchange 
        Act of 1934, as added by subsection (a) of this section, shall 
        be provided by the issuer in a report in a machine readable 
        format prescribed by the Commission, which shall be made 
        available to the public online, in such machine readable format 
        as the Commission shall prescribe.
            (3) Effective date.--Subsection (t) of section 13 of the 
        Securities Exchange Act of 1934, as added by subsection (a) of 
        this section, shall take effect on the date that is 1 year 
        after the date on which the Commission issues a final rule 
        under paragraph (1)(B).
                                 &lt;all&gt;
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