Report highlights Island’s role in US tax avoidance – The Royal Gazette | Bermuda News, Business, Sports, Events, & Community

Log In

Reset Password

Report highlights Island’s role in US tax avoidance

Bermuda features prominently in a report on US corporate tax avoidance released this month.

The report entitled ‘Corporate America Untaxed: Tax Avoidance on the Rise’, which was published by The Greenling Institute, a national policy, research, organisation and leadership group, revealed that 184 significant corporate subsidiaries were based in Bermuda - considerably less than the likes of the Cayman Islands (580) and Ireland (287), but more than Switzerland (179).

It also disclosed that the Island accounted for 10.4 percent of dividends that came back to the US during the 2004 one-time tax holiday that allowed corporations to repatriate offshore earnings, according to Internal Revenue Service figures.

Last year American corporations avoided approximately $60 billion in US corporate income taxes through using “devices and gimmicks” to shift profits to foreign subsidiaries, according to the report, and since the US Government Accountability Office reviewed the issue in 2008, top companies had added 44 new subsidiaries in countries it had identified as tax havens.

Fifty-two of the 100 largest corporations in terms of 2010 revenue added at least one subsidiary in a tax haven and 21 companies reduced their subsidiaries in tax havens by at least one between 2008 and 2010, the report stated, with each company adding on average 2.9 foreign subsidiaries and 0.5 in a tax haven over that period.

CitiGroup was the outlier, decreasing its number of foreign subsidiaries by 1,129 during that time, 404 of which were in tax havens.

Caterpillar Inc, which has 10 Bermuda subsidiaries listed on the Registrar of Companies website, was listed as having 38 subsidiaries based in tax havens, down by 11 between 2008 and 2010, bringing in revenue of $42.5 billion. General Electric (GE), which also has 10 subsidiaries listed in Bermuda, has 14 significant subsidiaries in tax havens and 57 significant foreign subsidiaries, bringing in revenue of $151.6 billion, and Google, with six subsidiaries on the Island, had two significant subsidiaries in tax havens and two significant foreign subsidiaries, with a revenue stream of $29.3 billion.

GE made $94 billion in undistributed earnings of profits from foreign subsidiaries, while Google earned $17.5 billion.

You must be Registered or to post comment or to vote.

Published August 02, 2011 at 2:00 am (Updated August 02, 2011 at 9:19 am)

Report highlights Island’s role in US tax avoidance

What you
Need to
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon