Legislative update: House passes bill requiring country-by-country reporting of pre-tax profits, taxes paid
Consideration by U.S. Senate uncertain
The bill includes the provisions of H.R. 3007
The U.S. House of Representatives today passed H.R. 1187, the “ESG Disclosure Simplification Act of 2021,” by a vote of 215 to 214.
The bill includes the provisions of H.R. 3007, the “Disclosure of Tax Havens and Offshoring Act”—a bill that would require public companies to disclose certain financial information on a country-by-country (CbC) basis, including “total income tax paid on a cash basis to all tax jurisdictions.” Read prior coverage of House Financial Services Committee approval of H.R. 3007: TaxNewsFlash
The bill would amend the Securities Act of 1934 to require:
- Companies to comply with CbC reporting rules
- Companies to disclose a number of specific tax-related items for each of its subsidiaries, as well as on a consolidated basis, such as total accrued tax expenses, stated capital, and total accumulated earnings
The proposed effective date for the CbC measures would be one year from the date on which the Securities and Exchange Commission adopts a final rule implementing the CbC provision.
Documents
Read text of the bill as approved by the House Financial Services Committee and incorporated into H.R. 1187 and a committee report [PDF 596 KB] accompanying the bill.
A release [PDF 283 KB] related to H.R. 3007 from the Financial Services Committee notes that currently, there is no requirement for public companies to disclose their tax liabilities or the domestic or foreign governments to which they are owed or paid.
What’s next?
The bill would have to be considered and passed (expected to require 60 votes) in the Senate and then signed by the president to become law.
KPMG observation
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.