A new report released this week by Citizens for Tax Justice (CTJ), the Institute of Taxation and Economic Policy (ITEP) and the US Public Interest Research Group (PIRG) posits that Fortune 500 (US-based) companies have stashed away close to $2.5 trillion in offshore accounts in an effort to reduce their tax burdens.
According to the report, “multinational corporations use tax havens to avoid an estimated $100 billion in federal income taxes each year” with 367 of the top 500 companies keeping 10,366 tax haven subsidiaries.
Furthermore, the top 30 firms “with the most money officially booked offshore for tax purposes collectively operate 2,509 tax haven subsidiaries,” the most popular destinations being the Netherlands. As a group, these 30 companies “account for 66 percent or $1.65 trillion” of the total figure for Fortune 500 companies.
The study also claims that most of America’s largest corporations maintain subsidiaries in offshore tax havens. At least 367 companies, or 73 percent of the Fortune 500, operate one or more subsidiaries in tax haven countries.
All told, these 367 companies maintain at least 10,366 tax haven subsidiaries.
The 30 companies with the most money officially booked offshore for tax purposes collectively operate 2,509 tax haven subsidiaries.
Approximately 58 percent of companies with tax haven subsidiaries have set up at least one in Bermuda or the Cayman Islands, two particularly notorious tax havens. The profits that all American multinationals, not just Fortune 500 companies, collectively claimed they earned in these two island nations according to the most recent data totaled 1,884 percent and 1,313 percent of each country’s entire yearly economic output, respectively.
This practice, says the report, is unfair: “multinational companies that depend on America’s economic and social infrastructure are shirking their obligation to pay for that infrastructure when they shelter their profits overseas.”
Read more at: Tax Times blog