1. Seminar 8:
MNCs and tax

2. Reducing tax bills
• Multinational corporations (MNCs) use
several methods to reduce their tax bills
• Many of these methods are perfectly legal:
• a) they take advantage of loopholes in
existing tax laws
• b) they take advantage of lower rates of
taxation in some countries

3. Registration scams
• Corporations often register their legal
addresses in low-tax jurisdictions to
reduce their tax liabilities
• Such registrations often involve the
creation of fictitious entities, with the
companies conducting no actual
transactions in the place of registration

4. BMW

5. Samsung

6. Gazprom

7. Coca Cola

8. Ugland House?

9. Ugland House
• Ugland House, in the British Cayman
Islands, is the registered legal address of
more than 18,000 companies
• The Cayman Islands are a notorious tax
haven, where multinational companies
divert profits to minimise their tax liabilities

10. 1209 North Orange Street,
Wilmington, Delaware?

11. Delaware
• 1209 North Orange Street, in Wilmington,
Delaware is the legally registered office of
more than 200,000 corporations, including
Ford, Coca Cola, General Motors and
Kentucky Fried Chicken
• These companies all benefit from
Delaware’s business-friendly tax laws,
allowing them to reduce their corporate tax
bills

12. Other tax havens
• British Virgin Islands
• Belize
• Luxembourg
• Monaco
• Switzerland
• Hong Kong
• Mauritius
• Liechtenstein

13. Transfer pricing
A simple guide from the Guardian
http://www.guardian.co.uk/flash/pa
ge/0,,2201916,00.html

26. Fake loans
• MNC subsidiaries in high-tax jurisdictions
often take out loans from other
subsidiaries
• The interest on these loans can be offset
against profits
• The loans can often be suspiciously large,
allowing subsidiaries to reduce declared
profits and thus minimise their tax liabilities