Uncovering Tax Havens

Posted on May 28, 2022

Uncovering Tax Havens

U.S. multi-national companies are being investigated to ensure they are complying with the U.S. tax code. During a U.S. Senate investigation of Apple Inc., it was found the company used subsidiaries in Ireland to pay a much lower corporate tax rate and minimize its tax liability in the U.S.

Although Ireland denies it gave special privileges to Apple, their tax policies are now being investigated by various agencies after the U.S. Senate termed Ireland ‘a tax haven’.

Switzerland, the country well-known as a tax haven, is now under agreement with U.S. authorities to disclose the financial details of U.S. taxpayers who hold unaccounted money in Swiss banks. Many Swiss banks will now transfer financial information to U.S. authorities on U.S. taxpayers that hold large amounts of money in Swiss banks to evade taxes in the U.S.

The U.S. loses billions of dollars each year to tax evasion. During the recession, public anger turned towards the wealthy and large corporations who do not comply with the tax code and minimize their tax liability, either by exploiting loopholes, or using illegal methods. The investigation of Apple and other large multi-national companies, such as Microsoft and HP is a part of the effort to get the wealthy and large corporations to comply with the country’s tax laws.

The present efforts will bring down tax evasion and discourage others to indulge. It is only after the results of the efforts become public that the extent of the effectiveness of the present efforts will become clear.

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