How Tech Companies Avoid Taxes Explained with Magic
Released on 04/15/2015
[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)
Produced by Kornhaber Brown
Magician: Jordi Magomero
Sources:
Tax Haven Subsidiaries; Tax Rates on Offshore Profit
Profit Offshore
Info on Dell
Microsoft Acquisitions
Apple’s Falling Tax Rate
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