Boustany introduces BEPS Act to protect U.S. companies’ country-by-country reporting

Legislation introduced on Tuesday by U.S. Rep. Charles Boustany (R-LA) would safeguard companies in country-by-country reporting requirements.

The Bad Exchange Prevention Act follows the issuance by the Treasury Department on Monday of guidelines for adhering to the country-by-country reporting requirements under the Organization for Economic Cooperation and Development’s (OECD) Base Erosion and Profit Sharing (BEPS) Action Plan.

Countries would be required under BEPS to report more financial, tax and transfer pricing information to tax authorities. BEPS also requires the filing of a master file containing all relevant information, a local file specifically referring to local transactions, and a country-by-country report detailing information on global allocation of corporations’ income and taxes. Critics of the guidelines warn that the authority of the Internal Revenue Service to request and obtain such information for BEPS purposes is questionable and that sensitive data could be placed in jeopardy if foreign governments conduct fishing expeditions to obtain it.

Under Boustany’s legislation, country-by-country reporting of U.S. companies from the Treasury Department to any foreign jurisdiction would be delayed until 2017. The legislation also establishes that the Treasury Department will suspend reporting to any nation found to either be abusing master file documentation or failing to safeguard the confidentiality of information in the master file.

“When American companies compete on a fair and level playing field in the global marketplace, we win,” Boustany said. “But new country-by-country reporting requirements under the Base Erosion and Profit Sharing Action Plan threaten to put our companies and workers at a disadvantage by allowing foreign entities to troll for sensitive information. My BEPS Act will provide more time for the U.S. government to prepare for these new requirements while putting strong protections against abuse in place to ensure American companies can compete and succeed.”