New Transparency Rules Reveal Tax Haven Use

FASB’s Accounting Standards Update 2023-09 requires publicly traded companies to break out the impact of specific tax credits, U.S. and foreign tax policies, and the effect of individual jurisdictions on their total tax expense. These disclosures, which FACT says tax experts and investors long advocated for, are designed to clarify how companies’ global tax strategies impact their effective tax rates.

The new disclosures “have proven to be as useful as we were hoping,” Georges told Checkpoint. They’ve been helpful “both in terms of what they’re able to tell us about general trends in international corporate tax, but also in terms of … provid[ing] maximum benefit to investors.” Georges noted he’s spoken to investors who are finding the disclosures “very, very useful.”

FACT’s analysis found that tax-haven savings was concentrated among pharmaceutical and biotech companies. Ten companies – AbbVie, Biogen, Bristol Myers Squibb, Eli Lilly, Gilead, Johnson & Johnson, Merck, Pfizer, Regeneron, and Thermo Fisher Scientific – reported particularly high savings from tax havens, according to FACT.

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