More than 70 percent of Fortune 500 companies booked their profits to offshore tax havens in 2013, with just 30 companies accounting for 62 percent of money in tax havens, according to a new report.
The report, from the advocacy groups Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund, identified the Fortune 500 companies with the most tax haven subsidiaries, the most profits officially booked offshore, and the most success in avoiding paying corporate income taxes to any government at all. They include prominent corporate titans such as American Express, Apple, Bank of America and Nike.
The report found that Fortune 500 companies collectively have 7,827 subsidiaries. It noted that many more subsidiaries may be undisclosed, particularly for companies such as Citigroup, Google and Microsoft that have reported fewer tax haven subsidiaries in recent years even as the amount of profits they officially book offshore has increased dramatically.
“Some companies, such as Apple, American Express and Nike essentially admit that most of their offshore profits are not taxed by any government, while other companies like Bank of America, PepsiCo and Pfizer each disclose having over 100 subsidiaries in offshore tax havens,” said the groups.
However, another tax research group, the Tax Foundation, countered that the report was misleading. “Unfortunately, with such a small sample of corporations, this study paints a misleading picture of the tax burden corporations pay overseas,” wrote Kyle Pomerleau, an economist with the Tax Foundation’s Center for Federal Tax Policy, in a blog post Thursday. “Its findings contradict other studies and more importantly IRS data, which reports corporations actually paid a tax rate of about 27 percent on their reported foreign income. It also doesn’t mention the fact that its proposed changes to tax law would move the United States further from international norms and would harm the economy.”