Yesterday’s Wall Street Journal op-ed by Douglas Holtz-Eakin at American Action Forum raises some of the same concerns we’ve been hearing from our members about the BEPS recommendations from the Organization for Economic Co-operation and Development aimed at curbing tax avoidance and international profit shifting.
As Holtz-Eakin notes, the rules go too far and could place onerous new compliance burdens on companies and risk exposing companies’ sensitive and proprietary business information. In particular, the proposed ‘master file’ requirement, could force U.S. companies to hand over a comprehensive business roadmap of their international operations to foreign tax authorities, with no confidentiality protections in place.
For U.S. manufacturers, and especially private enterprises, the master file provision represents a real threat, as sensitive company information could leak out to rival companies, making it more difficult for American businesses to compete internationally.
As Mr. Holtz-Eakin notes in the article “Nothing could be more valuable to a U.S. company’s competitors than the information in the master file. But the master file isn’t subject to any confidentiality safeguards beyond those a foreign government decides to provide. A foreign government could hand the information over to any competitor or use it to develop a new one. And the file could be hacked.”
Because of this threat to one of the most diverse and important industries in the U.S., the NAM is working diligently to protect American businesses from the harmful effects of provisions in the BEPS project, like the master file requirement. We urge Congress and the U.S. Treasury Department to safeguard the manufacturing industry and to support initiatives that will protect the U.S. manufacturing industry from the harmful effects of certain provisions in the BEPS project.