PennPIRG, 7/31/13

The Use of Offshore Tax Havens by the Top 100 Publicly Traded Companies

Many large U.S.-based multinational corporations avoid paying U.S. taxes by using accounting tricks to make profits made in America appear to be generated in offshore tax havens – countries with minimal or no taxes. By booking profits to subsidiaries registered in tax havens, multinational corporations are able to avoid an estimated $90 billion in federal income taxes each year. These subsidiaries are often shell companies with few, if any employees, and which engage in little to no real business activity.

Loopholes in the tax code make it legal to book profits offshore, but tax haven abusers force other Americans to shoulder their tax burden. Every dollar in taxes that corporations avoid by using tax havens must be balanced by other Americans paying higher taxes, coping with cuts to government programs, or increasing the federal debt.

This study reveals that tax haven use is ubiquitous among the largest 100 publicly traded companies as measured by revenue.

82 of the top 100 publicly traded U.S. companies operate subsidiaries in tax haven jurisdictions, as of 2012.

All told, these 82 companies maintain 2,686 tax haven subsidiaries.

The 15 companies with the most money held offshore collectively operate 1,897 tax haven subsidiaries.

The 15 companies with the most money offshore hold a combined $776 billion overseas. That is 66 percent of the approximately $1.17 trillion that the top 100 companies keep offshore. This list includes:

Apple: A recent Senate investigation found that Apple pays next to nothing in taxes on the $102 billion it books offshore, which is the second highest amount of any company. Manipulating tax loopholes in the U.S. and other countries, Apple has structured three Irish subsidiaries to be tax residents of neither the U.S. –where they are managed and controlled – nor Ireland – where they are incorporated. This arrangement ensures that they pay no taxes to any government on the lion’s share of their offshore profits. Two of the subsidiaries have no employees….

continue reading and download the full report at PennPIRG


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