TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, December 6, 2018

Shareholders Are At Risk From Lack Of Corporate Tax Disclosures

FACT Coalition, New Study: Shareholders at Risk from Lack of Corporate Tax Disclosures:

Investors are at an increasing risk from the lack of information disclosed by companies about their tax practices, according to a new analysis published today by the Financial Accountability and Corporate Transparency (FACT) Coalition.

The FACT Coalition is a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system that addresses the challenges of a global economy and promoting policies to combat the harmful impacts of corrupt financial practices.

Titled Muddled Markets: Investors Increasingly at Risk from Lack of Disclosures about Corporate Tax Practices, the report finds that multinational companies have become increasingly reliant on offshore tax avoidance practices to boost short-term earnings in recent years, yet disclosure requirements haven’t kept pace with this changing world.  As governments around the globe struggle with growing budget deficits, tax authorities are increasingly cracking down on aggressive tax avoidance practices, which can have a significant impact on shareholder value.  At the same time, shifting national policies around international taxation — including, but not limited to, the recent tax overhaul in the United States — create complexity and uncertainties with respect to returns for investors.

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A look at the membership making up FACT shows them to be entirely left of center activist groups. Nothing wrong with that but anyone who thinks a) they're nonpartisan, and b) have the interests of shareholders in mind has probably bought the Brooklyn Bridge at least once.

Posted by: PaulB | Dec 6, 2018 3:02:44 PM