Apr 15, 2016

Panama Papers: Oxfam report reveals 50 US corporate giants with offshore tax havens

Source : India Today

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As more skeletons tumble out of the 'Panama Papers' closet, an Oxfam report has revealed that 50 US corporate giants, including Apple, Microsoft, Google and Walmart, have stashed around a staggering $1.4 trillion in offshore tax havens.

As more skeletons tumble out of the 'Panama Papers' closet, an Oxfam report has revealed that 50 US corporate giants, including Apple, Microsoft, Google and Walmart, have stashed around a staggering $1.4 trillion in offshore tax havens.

According to a report by antipoverty charity Oxfam America, from 2008 to 2014, even as these 50 companies earned nearly $4 trillion in profits globally from 2008 to 2014, they used offshore tax havens to lower their effective overall tax rate to just 26.5 per cent, well below the statutory rate of 35 per cent and even below average levels paid in other developed countries. These companies relied on an opaque and secretive network of more than 1,600 disclosed subsidiaries in tax havens to stash about $1.4 trillion.

"Tax dodging by multinational corporations costs the US approximately $111 billion annually. But these schemes do not just harm the US. The same tactics corporations use to dodge US tax sap an estimated $100 billion every year from poor countries preventing crucial investment in education, healthcare, infrastructure, and other forms of poverty reduction. The harm done to Americans and people living in poor countries by corporate tax dodging are two sides of the same coin," the report further said.

Oxfam added that the analysis sheds light on just how rigged the tax system has become and shows that these same companies are using considerable political influence to push for even greater rewards in the forms of loans, bailouts and other government support. "The analysis highlights the vast taxpayer-funded support the largest and most profitable US companies receive even as they engage in aggressive schemes to avoid paying taxes."

Pfizer, Google's parent company Alphabet and Exxon Mobil are also among the top ten in the list. "Perhaps, the worst form of tax avoidance is an inversion-when a US company renounces its US citizenship by buying a foreign subsidiary in a low-tax jurisdiction where it reincorporates. In some cases, nothing changes about the actual business-the new inverted company remains headquartered in the US and still conducts business from the US enjoying all the advantages of the US market, but no longer pays its rightful share of US taxes," the report added.

Oxfam further added that profits disappear from countries where real economic activity is taking place to exist only in tax havens.

Source: India Today

 

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