Photo Gallery: Masters at Tax Avoidance
Photo Gallery Masters at Tax Avoidance
Multinationals are masters at avoiding hefty tax bills. By shifting money back and forth between subsidiaries and establishing presences in tax oases, big companies can lower their tax bills, and it is all completely legal. But with many Western states struggling to increase tax revenues, a movement is afoot to close some of the loopholes.
Multinationals are masters at avoiding hefty tax bills. By shifting money back and forth between subsidiaries and establishing presences in tax oases, big companies can lower their tax bills, and it is all completely legal. Microsoft, for example, paid just $1.7 billion in taxes in 2010 on $15.4 billion in profits earned overseas.
Foto: Laura Segall/ Getty Images
Most of those companies that have proven particularly adept at using international tax laws to their advantage are headquartered in the US. But German utility E.ON could soon join them once it achieves the status of European stock corporation (SE) next year. Here, an E.ON power plant in Bielefeld.
Many countries like Starbucks like to promote the image of being environmentally conscious, progressive and socially responsible. But when it comes to allowing the government to collect a suitable portion of their corporate profits, the icons of global capitalism are not quite as socially minded.
Foto: JEWEL SAMAD/ AFP
In 2010, Google posted overseas profits of $5.8 billion yet paid a mere $200 million in taxes. Most of the company's profits earned in Europe are posted to Google Ireland Ltd., based in Ireland, where tax rates are low. Furthermore, most of those revenues are consumed by expenses, including a $7.2 billion licensing fee paid to a Dutch subsidiary.
Foto: DPA/ Google
Apple is perhaps the global leader when it comes to navigating around taxes and through loopholes. On $13 billion in overseas profits earned in 2010, the company paid just $100 million in taxes.
Years ago, the Organization for Economic Cooperation and Development (OECD) estimated that 60 percent of all international trade happens within multi-national corporations. Following the letter of the law, they do business with themselves, taking advantage of tax laws in different countries to minimize their burdens. Coca Cola in 2010, for example, paid just $1.2 billion in taxes on $7 billion in profits earned overseas.
Foto: SCOTT OLSON/ AFP
Graphic: High profit and low taxes.
Foto: DER SPIEGEL