How Legal Loopholes Allow Corporations to Avoid Taxes
Beginning in force in the mid 90s, U.S. multinationals have been avoiding corporate income taxes by shifting profits into shell companies in havens like Bermuda, the Switzerland and the Cayman Islands. At home, they have exerted tremendous lobbying pressure on Congress to get a second tax break to bring those profits back home. Bloomberg has chronicled the methods by which some of the world's largest corporations have legally used loopholes to avoid large tax bills.
Google Inc., Facebook Inc. and LinkedIn Corp. wound up in Ireland because they could reduce their tax bills. Their success is leading European and U.S. politicians to label the country a tax haven that must change its ways.
Apple Inc. Chief Executive Officer Tim Cook provided a figure to Congress on Tuesday that U.S. companies rarely disclose: its federal tax bill. Apple paid $6 billion last year -- a rate of 30.5 percent.
U.S. Senate scrutiny of Apple Inc.’s tax strategies turned the spotlight on a unit with $30 billion in profit since 2009 that’s incorporated in Ireland, controlled by a board in California, and doesn’t pay taxes in either place.
May 13, 2013 -- In early November, members of the U.K. Parliament assailed executives from Google Inc. (GOOG), Starbucks Corp. and Amazon.com Inc. for moving billions of dollars in profits into tax havens.
March 18, 2013 -- Headquartered in a former Rothschild chateau in an affluent Parisian neighborhood, the Organization for Economic Cooperation and Development is best known for earnest conferences on economic and social policy
Dec. 10, 2012 -- Google Inc. avoided about $2 billion in worldwide income taxes in 2011 by shifting $9.8 billion in revenues into a Bermuda shell company, almost double the total from three years before, filings show.
Oct. 13, 2011 (Bloomberg) -- The U.S. Internal Revenue Service is auditing how Google Inc. (GOOG) avoided federal income taxes by shifting profit into offshore subsidiaries, according to a person with knowledge of the matter.
Sept. 29, 2011 (Bloomberg) -- As a coalition led by Apple Inc. (AAPL), Google Inc. (GOOG), and Cisco Systems Inc. (CSCO) presses for a tax holiday on more than $1 trillion in offshore profits, it is turning to a well-positioned lobbyist: Jeffrey Forbes, once chief of staff to Max Baucus, chairman of the tax-writing Senate Finance Committee.
June 28, 2011 (Bloomberg) -- Cisco Systems Inc. (CSCO) has cut its income taxes by $7 billion since 2005 by booking roughly half its worldwide profits at a subsidiary at the foot of the Swiss Alps that employs about 100 people.
May 17, 2011 (Bloomberg) -- Google Ireland is not a branch office of the U.S.-based search giant Google Inc. (GOOG) It’s a separate corporation, and American tax collectors can’t touch a dime that Google Ireland earns from its core business until it sends profits back home to the mother ship in Mountain View, California.
Dec. 29, 2010 (Bloomberg) -- At the White House on Dec. 15, business executives asked President Obama for a tax holiday that would help them tap more than $1 trillion of offshore earnings, much of it sitting in island tax havens.
July 23, 2010 (Bloomberg) -- A U.S. tech company identified only by the pseudonym “Delta” generated as much as 55 percent of its revenue domestically while reporting to shareholders that only 10 percent of its pretax income came from U.S. operations, according to a report presented to the House Ways and Means Committee.
May 13, 2010 (Bloomberg) -- Over the past three years, Pfizer Inc. was an earner without profit in its own country. The maker of the cholesterol medication Lipitor, the world’s top-selling prescription drug, reported almost half its revenues in the U.S. for 2007 through 2009, while booking domestic pretax losses totaling $5.2 billion
March 17, 2011 (Bloomberg) -- On National Public Radio's "Fresh Air," Bloomberg News reporter Jesse Drucker explains how companies like Google, Pfizer, Lilly, Oracle, Facebook and Microsoft have managed to reduce their tax rates by taking advantage of offshore tax havens.