Corporate tax dodgers sitting on trillions

Some of the biggest corporations in the US collectively have stashed US$2.1 trillion in offshore tax havens, according to a new report.

“Shell games 2015: the use of offshore tax havens by Fortune 500 companies”, published by Citizens for Tax Justice and the US Public Interest Research Group, highlights the massive scale of corporate tax dodging.

The report calculates that the US’s 500 leading companies would owe $620 billion in federal taxes if their cash was held in the United States, rather than offshore. According to the US Census, poverty could be eradicated in the country for less than a third of that amount.

Tax dodging schemes are managed by large and creative accounting departments, which set up shell or subsidiary companies in different countries. Pharmaceutical company Pfizer, for example, holds $74 billion offshore and operates a web of 151 subsidiaries in tax havens.

The Cayman Islands is apparently a firm favourite for companies looking for a haven: Ugland House, a five-storey building in George Town, the capital, is the registered address of no less than 18,857 companies.