Cisco urges shareholders to vote against global tax reports • The Register

Cisco has asked its shareholders to vote against a proposal that would ask the company to release a tax transparency report detailing where it pays its taxes by country.

The decision was proposed by three investors – including the Greater Manchester Pension Fund (GMPF), which did so $41bn (£38bn) under management [PDF] – on June 24, calling on Cisco to adopt the Global Reporting Initiative (GRI) tax standard and publish a tax transparency report for shareholders.

According to shareholder advisory group Pensions & Investment Research Consultants (Pirc), Cisco’s letter advising shareholders to vote against said it would “potentially have an adverse impact on our business.”

Back in June, around the same time as Cisco’s tax transparency request, a similar proposal – also coordinated by Pirc – was tabled by Microsoft shareholders, including Nordic wealth management company Nordea Bank Abp and several Danish pension funds. We asked Microsoft if it intends to vote on the proposal at its AGM.

Amazon, which has repeatedly been criticized for a lack of transparency in its international tax operations, also by none other than US President Joe Bidenwas asked to prepare country-by-country reporting in March this year, but shareholders didn’t make the decision when the AGM came in Can [PDF].

That came after Amazon noticed in a filing challenging the suggestion that “the company already provides, in its publicly filed annual and quarterly reports to the Commission, comprehensive and detailed disclosures of its income tax contributions in accordance with generally accepted accounting principles in the United States … by requesting additional reporting.” With certain types of disclosures related to taxes, as required by GRI 207, the proposal extends to topics that would not be amenable to direct shareholder oversight.”

GMPF’s tax transparency proposal, co-signed by shareholders Etica Funds and Missionary Oblates, is expected to be put to a shareholder vote at Cisco’s annual general meeting.

Cisco, unlike Amazon, its lawyers allegedly tried and failed to get the SEC to bar the issue from a vote at the May AGM, got support from one of the funds for actually getting it put to the vote.

“Following Amazon’s attempt to scrap our proposal, it is gratifying to see Cisco accepting the need to vote on it,” Gerald Cooney, chairman of the GMPF, said in a statement today. “Local governments are so often at the forefront of budgetary restrictions and cuts, with all sorts of negative social consequences. It is of the utmost importance that companies like Cisco pay their fair share and contribute to the societies in which they operate and generate their profits in. We look forward to having the opportunity to attend Cisco’s Annual General Meeting later this year vote.”

Aldo Bonati, manager of stewardship and ESG networks at Etica Funds, said it had tried “to get in touch with Cisco” with little success.

The company usually holds its annual general meeting in the second week of December.

Cisco declined to comment.

The move comes after US SEC Chairman Gary Gensler made comments broadly supporting a plan by the Financial Accounting Standards Board (FASB) for large multinationals to make public every country in which they pay taxes and record profits Report to.

speaking at a Listen Speaking to the Senate Committee on Banking, Housing and Urban Affairs earlier this month, Gensler indicated that the agency was reviewing whether there was a need for increased reporting from global organizations.

“I think that would be a productive approach to such a breakdown, which the FASB is considering right now,” Gensler said at the committee hearing.

In an EU policy Officially adopted late last year, multinationals with total consolidated sales of 750 million euros ($721 million) must submit a country-by-country report if they are an EU parent company or otherwise have EU subsidiaries or branches of a certain size. It is intended to contain information for each taxing jurisdiction in which the group does business and, in addition to revenue, profits and taxes, also contains data on the number of employees, retained earnings and property, plant and equipment in each location in which it operates. ® Cisco urges shareholders to vote against global tax reports • The Register

Laura Coffey

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