Majority Of Fortune 500 Using Offshore Tax Schemes To Hide $90 Billion
According to a new report from Citizens for Tax Justice and the U.S. Public Interest Research Group, the majority of America’s Fortune 500 companies are cheating the tax man to the amount of approximately $90 billion by using offshore tax havens. That cheating leaves the rest of US taxpayers on the hook to make up the difference.
The companies are household names with Apple, GE, Microsoft, Pfizer and Merck being the top five tax code abusers. The firms use shell companies registered offshore where they can “defer paying taxes indefinitely” as long as they do not bring that money back into the US.
The cheating is allowed thanks to compromised members of Congress inserting loopholes into the tax code and the companies’ use of skilled accountants and tax lawyers.
The companies sometimes spread their profits across hundreds of tax haven subsidiaries. All told, the report identified 7,827 tax havens, and the “30 companies with the most money officially booked offshore for tax purposes collectively operate 1,357 tax haven subsidiaries.”
The Netherlands, Singapore, Hong Kong, Luxembourg and the Cayman Islands are the top five most common places to store profits, the report found. Ireland, in seventh place, is a popular place for subsidiaries of Apple Inc. and Google.
Apple is one of the more blatant abusers with with $111.3 billion offshore and a $36.4 billion US tax liability. In some cases Apple may not have paid taxes on its profits to any government including the minuscule amounts required by the tax havens it uses.
With Apple and Google keeping the NSA happy I guess they can feel free to put the IRS out of their minds. Then again, this is technically legal. Though many corporate spokespeople have claimed they may be willing to bring the money back to the US if the tax rate was lowered from 35%. An interesting strategy on how to deal with paying your taxes, one that would not be advisable for the average American to try with the IRS.