WASHINGTON (Bloomberg) - The Democratic chairman and top Republican on the Senate Finance Committee said they will move carefully to revamp the way the US taxes companies' foreign profits after a report said commonly advocated overhaul options have flaws.

The Government Accountability Office (GAO), in a report requested by committee chairman Max Baucus of Montana and Senator Charles Grassley of Iowa, said countries with different international tax rules face many of the same problems as the US in seeking compliance with tax laws.

"This report makes clear there are significant inherent challenges in international tax-policy reform, and the complexity of the issues requires us to move carefully and thoughtfully," Baucus, a Democrat, said in a joint statement with Grassley.

Baucus's comments strike at one of President Barack Obama's priorities after taking office: a proposal to repeal or limit three legal but often criticised techniques companies use to delay or avoid US tax on their overseas profits. The president also has backed legislation by Michigan Senator Carl Levin, a Democrat, that would penalise American companies for shifting profits to low-tax countries such as Bermuda and Switzerland.

Baucus and Grassley asked for the GAO study as a precursor for a comprehensive effort to revamp the tax laws that the pair said they are planning.

"This report underscores that US international taxation is complex," Grassley said. "It shouldn't be changed without thorough review and consideration by the finance committee, and shouldn't be done through the use of simplistic, rigid and inaccurate 'blacklists' of disfavoured countries."

Obama's proposals have been criticized by businesses including Microsoft Corp.

White House spokeswoman Jen Psaki said this week the president continues to push his proposals.

"While we have an open door to the ideas and concerns of business leaders, we remain as committed to reforming international corporate taxation to end unfair loopholes as we were the day the president announced the plan," she said after the Wall Street Journal reported earlier this week that the White House had shelved the proposals in response to business lobbying.

GAO said it studied tax rules in five countries: Australia, Canada, France, Germany and the Netherlands. It concluded that none could accurately estimate the extent of unpaid taxes on their companies' foreign profits or the cost for companies to comply with the law.

The report recommended the Internal Revenue Service begin reporting how much in taxes is collected on American companies' foreign profits, something the Treasury Department agreed to have the agency do.