• Large U.S. Corporations and Federal Contractors with Subsidiaries in Jurisdictions Listed as Tax Havens or Financial Privacy Jurisdictions
  • Government Accountability Office
  • Report to Congressional Requesters
  • 63 pages
  • Public
  • December 2008

Eighty-three of the 100 largest publicly traded U.S. corporations in terms of 2007 revenue reported having subsidiaries in jurisdictions listed as tax havens or financial privacy jurisdictions. Sixty-three of the 100 largest publicly traded U.S. federal contractors in terms of fiscal year 2007 federal contract obligations reported having subsidiaries in such jurisdictions. Since subsidiaries may be established in listed jurisdictions for a variety of nontax business reasons, the existence of a subsidiary in a jurisdiction listed as a tax haven or financial privacy jurisdiction does not signify that a corporation or federal contractor established that subsidiary for the purpose of reducing its tax burden. GAO did not attempt to determine if corporations or contractors with subsidiaries in such jurisdictions engaged in transactions with their subsidiaries to reduce their tax burden. In addition, the SEC only requires public corporations to report significant subsidiaries, so the number of subsidiaries in jurisdictions listed as tax havens or financial privacy jurisdictions for each corporation or federal contractor may be understated in this report.

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• Seventy-two of the 97 federal contractors had foreign subsidiaries and 25 did not. Sixty-nine of the 72 contractors also had subsidiaries in locations other than jurisdictions listed as tax havens or financial privacy jurisdictions.
• For the 63 federal contractors with subsidiaries in jurisdictions listed as tax havens or financial privacy jurisdictions, the number of such subsidiaries ranged from 1 for 11 contractors to a high of 83 for 1 contractor.
• Four federal contractors had more than 50 percent of their foreign subsidiaries in jurisdictions listed as tax havens or financial privacy jurisdictions. Three of the four had all of their foreign subsidiaries in such jurisdictions.
• Federal contractors had subsidiaries in 34 of the 50 jurisdictions listed as tax havens or financial privacy jurisdictions.
• Five of the jurisdictions listed as tax havens or financial privacy jurisdictions had more than 100 federal contractor subsidiaries, ranging from 111 to 156.
• Thirty-four of the 100 federal contractors are also on the list of 100 largest publicly traded U.S. corporations.

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