Clearly, American corporations are using various tax gimmicks to shift profits actually earned in the US and other countries where they actually do business into their subsidiaries in these tiny countries,” the report says.
US corporations are making record profits in tax havens like Bermuda, the Cayman Islands, and the British Virgin Islands (BVI). Some of the profits exceed the GDP of the host country, with Bermuda’s offshore profits 1643% of total economic output.
As a share of Gross Domestic Product (GDP), profits from subsidiary US companies operating in the Netherlands are more than 100 percent of the country’s annual economic output, according to a new study by Citizens for Tax Justice, published Tuesday.
In Bermuda, US companies reported $94 billion in profit, but the island’s GDP is only $6 billion.
The report draws on data collected by the US International Revenue Service from subsidiaries reporting profits outside of the US in 2010.