Some American companies stash a significant portion of their cash overseas to take advantage of more favourable tax laws in other countries, sometimes known as “tax havens.” According to a new report from charity Oxfam, which is crusading to get the U.S. government to crack down on this practice, this costs the United States more than $100 billion a year in lost tax revenue.
Tech companies take particular advantage of this practice. This chart from Statista, based on the Oxfam report, shows how much money major US tech companies have overseas, and how many subsidiaries they have set up in countries that Oxfam defines as tax havens, “which can be characterised by secrecy, low- or zero-tax rates and the almost complete lack of disclosure of any relevant business information.” While tech is the most prominent sector on Oxfam’s list, it’s certainly not alone — large companies in other sectors like General Electric ($119 billion), Pfizer ($74 billion), Merck ($60 billion), and Exxon Mobile ($51 billion) also have lots of money stashed overseas.
There’s nothing illegal about this practice. But Oxfam believes it contributes to income inequality, and is urging U.S. lawmakers to make it harder for companies to use international tax laws to their advantage in this way.