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    How Tech Companies Avoid Taxes Explained with Magic

    Publicly traded U.S. tech companies have stashed as much as $530 billion in offshore tax havens. How’d they do it? Find out what magic tricks companies like Google, Apple, and Microsoft have up their sleeves.

    Released on 04/15/2015

    Transcript

    [Narrator] In total publicly traded US tech companies

    have stashed as much as 530 billion in offshore tax havens.

    Money that the US government may never see.

    Fan favorite Microsoft operates five shell companies

    that hold nearly 93 billion in profit,

    that's 29.6 billion in tax revenue, up in smoke.

    They've used some of that tax free profit

    to buy foreign companies like Nokia

    and most recently they burned 2.5 billion

    to buy Minecraft creator Mojang.

    Oracle operates six shell companies

    but they pay a measly four percent tax

    on their 39 billion stash.

    And Google has operated as many as 25

    shell companies in tax havens.

    Since no US taxes get paid on their $47.4 billion hoard

    these dollars truly become Google bucks.

    Make you wanna vomit?

    Well it gets worse.

    In 2011 Dell's Dutch subsidiary paid

    a one-tenth of one percent tax on two billion in profit.

    The kicker?

    The shell company had zero employees.

    Finally famous watch maker Apple

    has three Irish subsidiaries for tax purposes.

    As of 2013 two of these companies had zero employees

    yet altogether they hold 69.7 billion in profits.

    Which is 24 billion in taxes,

    yep, you guessed it, never paid.

    Given these strategies Apple's overall tax rate

    just keeps falling from 24.8% in 2009 to 14.7% in 2010,

    to 9.8% in 2011.

    Meanwhile it's become the world's most valuable company.

    So this year when you're sacrificing your paycheck

    to pay your taxes just think about all the ways

    you could turn that money back into profit

    if you were a big giant company.

    And if you want more Wired videos

    just click subscribe, it's good.

    (funky upbeat music)

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