US corporations dodging $1.4tn offshore, stealing from all of us...

US corporate giants such as Apple, Walmart and General Electric have stashed $1.4tn (£980bn) in tax havens, despite receiving trillions of dollars in taxpayer support, according to a report by anti-poverty charity Oxfam.

The sum, larger than the economic output of Russia, South Korea and Spain, is held in an "opaque and secretive network" of 1,608 subsidiaries based offshore, said Oxfam.

The charity's analysis of the financial affairs of the 50 biggest US corporations comes amid intense scrutiny of tax havens following the leak of the Panama Papers.

And the charity said its report, entitled Broken at the Top was a further illustration of "massive systematic abuse" of the global tax system.

Technology giant Apple, the world's second biggest company, topped Oxfam's league table, with some $181bn held offshore in three subsidiaries.

Boston-based conglomerate General Electric, which Oxfam said has received $28bn in taxpayer backing, was second with $119bn stored in 118 tax haven subsidiaries.

Computing firm Microsoft was third with $108bn, in a top 10 that also included pharmaceuticals giant Pfizer, Google's parent company Alphabet and Exxon Mobil, the largest oil company not owned by an oil-producing state.

Oxfam contrasted the $1.4tn held offshore with the $1tn paid in tax by the top 50 US firms between 2008 and 2014.

It pointed out that the companies had also enjoyed a combined $11.2tn in federal loans, bailouts and loan guarantees during the same period.

Overall, the use of tax havens allowed the US firms to reduce their effective tax rate on $4tn of profits from the US headline rate of 35% to an average of 26.5% between 2008 and 2014.

The charity said this had helped firms spend billions on an "army" of lobbyists calling for greater state support in the form of loans, bailouts and guarantees, funded by taxpayers.

The top 50 US firms spent $2.6bn between 2008 and 2014 on lobbying the US government, Oxfam said.

"For every $1 spent on lobbying, these 50 companies collectively received $130 in tax breaks and more than $4,000 in federal loans, loan guarantees and bailouts," said Oxfam.

Robbie Silverman, senior tax adviser at Oxfam said: "Yet again we have evidence of a massive systematic abuse of the global tax system.

"We can't go on with a situation where the rich and powerful are not paying their fair share of tax, leaving the rest of us to foot the bill.

"Governments across the globe must come together now to end the era of tax havens."

Oxfam estimates that tax avoidance by US corporations costs the world's largest economy some $111bn a year, but said it was also fuelling the global wealth divide by draining $100bn from the poorest countries.

"Tax dodging practised by corporations and enabled by federal policymakers contributes to dangerous inequality that is undermining our social fabric and hindering economic growth," the report said.

Oxfam also singled out British overseas territories such as Bermuda for their popularity with US firms seeking to slash their tax bill by "profit-shifting".

In 2012, said Oxfam, US firms reported $80bn of profit in Bermuda, more than their combined reported profits in Japan, China, Germany and France, four of the world's five largest economies.

The charity called on the US government to pass the Stop Tax Haven Abuse Act, including a requirement for firms to report their tax contribution on a country-by-country basis.

Country-by-country reporting has been recommended by a host of non-governmental organisations and charities to prevent companies from artificially shifting their income out of the poorest countries.

[+]

jail the rich...

jail the rich...

We could rephrase that for the 21st century by saying that the rich are different because they have more money, and because they stole it from us and keep hoping we won’t notice. They stole it from you and from me, and even more from billions of other, poorer people around the world. Wealth and poverty have always been with us, and probably always will. But the disparity we see around us, far greater than anything Fitzgerald’s rich and innocent Jay Gatsby could have imagined, is an enormous historical crime, and on some level everybody knows it. The Panama Papers hint at the scale of that crime, and the scale of the coverup.

Perhaps the rich still believe they deserve to be rich, and too many of the non-rich believe it too. But their desperate attempts to hide their wealth beneath armies of lawyers and nests of imaginary companies and mailing addresses on distant islands suggest otherwise. They’re afraid that the illusion may be crumbling. They’re afraid that one of these days we’ll figure out how they got that money and decide to take it back.

Facebook paid £4,327 corporation tax despite £35m staff bonuses...

Staff at Facebook's UK arm took home an average of more than £210,000 last year in pay and bonuses, while their employer paid just £4,327 in corporation tax. Facebook made an accounting loss of £28.5m in Britain in 2014, after paying out more than £35m to its 362 staff in a share bonus scheme, according to the unit's latest published accounts. Operating at a loss meant that Facebook was able to pay less than £5,000 in corporation tax to HM Revenue for the year. The share scheme was worth an average of more than £96,000 for each member of staff. Once salaries were taken into account, a British employee of Facebook received more than £210,000 on average. The level of tax contribution by Facebook, which claimed in 2013 that at least a third of UK adults visited its site every day, will add to the debate about how to ensure that multinationals make fair tax payments in each country in which they operate. Last year, Facebook made a profit on its worldwide operations of $2.9bn (£1.9bn), on revenue of $12.5bn. UK revenues were £105m last year. John Christensen, the director of campaign group the Tax Justice Network, said: "it's very likely they're using all the usual techniques to shift profits around." A spokesperson for Facebook said: "We are compliant with UK tax law, and in fact in all countries where we have operations and offices. We continue to grow our business activities in the UK". She added that all the firm's employees paid UK income tax on their payouts. Facebook recently secured the lease on a high-profile 227,324 sq ft office space in Rathbone Square, near Tottenham Court Road in London, where it plans to open a new headquarters in 2017. George Osborne, the chancellor, has pledged to crack down on tax avoidance by global firms by swiftly legislating to enact a new set of rules drafted by the Paris-based Organisation for Economic Co-operation and Development (OECD), which has become a hub for global tax reform in recent years. The so-called BEPS rules are aimed at cracking down on "base erosion and profit-shifting": the practices used by many global firms to minimise their tax liabilities by recording profits in low-tax jurisdictions. The chancellor has repeatedly cut corporation tax, which is levied on company profits, but he insists that in exchange all firms must pay their fair share to the exchequer. The main corporation tax rate was 28% when Osborne arrived at the Treasury, and is 21% today. "Taxes should be paid where profits are made," Osborne tweeted from the International Monetary Fund's annual meetings last week. "Great to see OECD BEPS rules agreed here in Lima. UK will lead by example and implement early". Separately, the chancellor has introduced a diverted profits tax, known as the "Google tax", aimed at preventing hi-tech international firms from minimising their tax liabilities in the UK. Christensen said these developments were likely to have an impact on multinationals such as Facebook. "They will have to change their model. The Google tax will probably close off some opportunities, and the BEPS rules are certainly moving in the right direction." However, he criticised the fact that while the new framework will force firms to reveal to the authorities in their home country how much tax they pay in each jurisdiction in which they operate, that information will not be more widely available for public scrutiny. The social and economic power of Facebook and its fellow Silicon Valley technology firms has come under increasing scrutiny in recent months. Last week, the European court of justice struck down the 15 year old "safe harbour" pact, under which US-based companies were allowed to hold the data of European citizens. Fears about US surveillance activities, as revealed by the whistleblower Edward Snowden, have intensified concerns about the role of Facebook and other social media platforms in safeguarding their users' privacy. Max Schrems, the Austrian privacy activist who brought the case, described it as a "puzzle piece in the fight against mass surveillance, and a huge blow to tech companies who think they can act in total ignorance of the law". [+]

Wal-Mart Is Hiding $76 Billion in Overseas Tax Havens

It turns out that Wal-Mart's slogan "Save money. Live better" might have a hidden meaning.

A report commissioned by progressive group Americans for Tax Fairness and researched by the United Food and Commercial Workers International Union claims that Wal-Mart Stores Inc. has hidden about $76 billion worth of assets in overseas tax havens.

Wait, $76 billion? According to the report, "at least 25 out of 27 (and perhaps all) of Wal-Mart's foreign operating companies" are held by shell companies or subsidiaries in tax havens. Wal-Mart's Luxembourg divisions own $64.2 billion in assets, while its companies in the Netherlands hold another $12.4 billion. Altogether, Americans for Tax Fairness claim 90% of Wal-Mart's international assets, or 37% of its total assets, are held in those two nations alone.

Source: Americans for Tax Fairness

The sparse offices in those tax havens manage approximately 3,500 overseas stores. The report alleges that this technique earned Wal-Mart Stores Inc. an effective tax rate of less than 1% on $1.3 billion in profits from 2010 to 2013 in Luxembourg.

All told, the group claims these tax avoidance strategies have saved the company $3.5 billion in taxes. It also says in 2014, "Wal-Mart's tax-haven subsidiaries provided U.S. affiliates access to $2.4 billion in foreign earnings — in the form of low-interest, short-term loans — which may transgress U.S. law."

**Wal-Mart denies any wrongdoing: **Wal-Mart spokesman Randy Hargrove told Mic via phone the $76 billion total is "an incorrect, inflated figure," but refused to elaborate on the allegations. When asked about their Luxembourg subsidiary, Hargrove confirmed Wal-Mart operated an office with staff there to "help facilitate our business operations in our international countries," but refused to provide any specific information about how many staff worked there.

"We disclosed these significant subsidiaries of the company in our 10k, and that complies by [U.S. Securities and Exchange Commussion] regulations," Hargrove said. "This is the same union-supported group that regularly issued flawed reports on Wal-Mart to promote their agenda rather than the facts."

Source: Joe Raedle/Getty Images

Why you should care: Wal-Mart's tax-avoidance strategy may well turn out to be technically legal, but it shouldn't be. _Bloomberg _reports many of the tactics Wal-Mart uses to shield profits from taxation have drawn the ire of regulators and Organisation for Economic Co?operation and Development representatives who believe the international community should do more to challenge tax havens.

Ultimately, a recent International Monetary Fund report concluded these kind of corporate tactics will cost nations around the world close to a trillion dollars in long-run tax revenue:

More specifically, previous Americans for Tax Fairness reports have alleged that Wal-Mart compensates its employees so poorly that the government doles out billions in health care, nutrition assistance and other payments to support them. Other research has confirmed Wal-Mart workers disproportionately rely on government benefits to make ends meet.

So if the facts in this new report are true, Wal-Mart is essentially bilking the U.S. government from both ends. Average taxpayers wouldn't get away with this, so why should Wal-Mart?

[+]

the only reason...