Pair of Bills Introduced Take Aim at Offshore Tax Havens

Chris Gaetano
Published Date:
Mar 14, 2019
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Seeking to discourage multinational corporations from skirting tax obligations, Rep. Lloyd Doggett (D-Texas) Sen. Sheldon Whitehouse (D-R.I.) have introduced a pair of bills that would strip many of the benefits companies receive by moving money through lower tax jurisdictions. 

The first bill, the No Tax Breaks for Outsourcing Act, would: 

* Tax income from overseas subsidiaries at the same rate as domestic income
* Repeal oil and gas industry tax breaks given by the Tax Cuts and Jobs Act
* Treat foreign corporations managed and controlled in the United States as domestic companies
* Maintain U.S. tax treatment of merged companies that retain majority U.S. ownership
* Limit how much debt subsidiaries can take on in order to reduce the taxes

The second, the Stop Tax Haven Abuse Act, would: 

* Prevent U.S. companies from electing to be treated as foreign for tax purposes, and, just like the other bill, would treat foreign corporations managed and controlled in the United Sates as domestic companies. 
* Require corporations to disclose country-by-country revenue, profits and employee count to the Securities and Exchange Commission. 
* Require that multinational corporations repatriate their profits immediately. 
* Require U.S. tax treatment of merged companies retaining majority U.S. ownership, like the other bill. 
* Prevent investors from using swap payments to avoid taxes. 
* Require disclosure of new bank accounts
* Allow the government to make a rebuttable presumption that U.S. taxpayers control the offshore entities they create. 
* Require that banks and brokers disclose to the IRS beneficial ownership information they discover while complying with existing anti-money laundering laws. 
* Impose additional anti-money laundering requirements from agents that form shell companies. 
* Give the IRS a streamlined process for investigating Swiss bank accounts, and for enforcing current disclosure requirements pertaining to them. 

Neither measure is new to Congress. The No Tax Breaks for Outsourcing Act was also introduced in February of last year, but it did not advance. The Stop Tax Haven Abuse Act has been proposed several times since at least 2007 before finally being introduced in 2013, but it was ultimately not enacted into law. 

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