Monsanto Finance Holdings Ltd, an Irish-incorporated company with an address on Lower Hatch Street, Dublin, made a profit of €2.5 million in 2012 but paid no tax, according to accounts just filed.
The firm made a profit of €3.69 million in 2011, when it again paid no tax.
The firm has no employees and its three directors have addresses in Bermuda.
The firm’s balance sheet shows that at the end of August 2012 it had financial assets of €50.8 million. Accumulated profits at that stage were €53.3 million and shareholders’ funds were €103 million. The firm is owned by a Monsanto company based in Switzerland, and is ultimately owed by Monsanto of St Louis, Missouri, US.
Global tax havens harbor close to 1/3 of the world’s GDP.
Tax Havens of the Wealthy and Powerful
More and more companies are stashing their cash offshore, and they’re doing it at alarming rates. Why? Put simply, it’s about eluding the tax man.
– $21 trillion =
– US, Japanese, and German economies combined.
– EU, Russian, and Indian economies combined.
– Total private wealth held in tax havens worldwide.
– $9.8 trillion =
– Private wealth held in tax havens by a mere 100,000 people.
– The amount of foreign aid the US would provide in 196 years at current rates.
“Double Irish with a Dutch Sandwich”
– Profits routed through Irish and Dutch subsidiaries often end up in Caribbean shell corporations that don’t pay US taxes.
– 83 of the 100 largest companies in the US with subsidiaries in tax havens.
Largest Major Corporate Investors
[corporation-unrepatriated income (in millions)]
– General Electric–$108,000
– Exxon Mobile–$47,000
– Johnson and Johnson–$49,000
[corporation-percentage increase in offshore investment 2009-11]
– Spectra Energy–%1141.8+
– Ford Motor–%546+
– Home Depot–%426.3+
– Starwood Hotels–%203+
– Unum Group–%197.6+
– Genworth Financial – %108.5+
Bailed out and bailing ship
Citigroup, Goldman Sachs, and Morgan Stanley were some of the larger bailouts of the 2008 financial crisis.
[corporation-amount received in bailout money-amount shipped offshore since-percentage increase since financial crisis]
– Citigroup–$2,500 billion–$35.9 billion–%32+
– Goldman Sachs–$10 billion–$20,630 million–%27+
– Morgan Stanley–$107 billion–$6,461 million–%61.5+
– %73 of Americans feel that loopholes should be closed allowing corporations and the wealthy to avoid US taxes by shifting income overseas.
– %83 of Americans feel that tax on US corporation’s overseas profits should be increased to equal what their US income tax would be.
– %90 of Small business owners believe that large corporations use loopholes to avoid taxes that smaller businesses have to pay.
[Tax Burden ]
Estimated Federal Income tax losses from tax havens = $150 billion per year
– US corporate untaxed wealth in tax havens= $90 billion
– US individual untaxed wealth in tax havens= $60 billion
– $150 billion = $1026 in additional taxes from every tax filer in the US.
– $150 billion = %6 percent of total reportable income for the US not filed correctly.
In 2007, tax havens accounted for nearly 9% of the world’s gross assets and liabilities. Meanwhile these nations accounted for only .2 percent of the world’s population and .25 percent of the world’s GDP.
[nation title; total portfolio investment (in millions, 2010 data); population 2010] [0= <1 mil]
– Andorra: 217 ; 83,888
– Anguilla: 627 ; 14,764
– Antigua and Barbuda:132 ; 82,000
– Aruba: 1874 ;101484
– Bahamas:17,101 ; 353,658
– Bahrain:11719 ; 1,234,571
– Barbados 2584 ; 276,300
– Belize: 340 ; 312,971
– Bermuda: 402,093 ; 64,237
– British Virgin Islands: 58,888 ; 106,405
– Cayman Islands: 1575332 ; 54,878
– Cook Islands:7 ; 21,390
– Costa Rica: 397 ; 4,563,539
– Cyprus: 18599 ; 1,102,677
– Djibouti: 3 ; 879,053
– Dominica: 1 ; 65,000
– Gibraltar: 3035 ; 28,956
– Grenada: 60 ; 109,553
– Guernsey: 82547 ; 44547
– Hong Kong: ; 7,024,200
– Ireland: 1090520 ; 4,467,854
– Isle of Man: 10394 ; 12,869
– Jersey: 232812 ; 95,732
– Jordan: 2260 ; 6,113,000
– Lebanon: 2670 ; 3,785,655
– Liberia: 7607 ; 4,101,767
– Liechtenstein: 5529 ; 35,789
– Luxembourg: 2051813 ; 502,066
– Macao: ; 552,300
– Maldives: 3 ; 319,738
– Malta: 3389 ; 414,372
– Marshall Islands:12082; 54816
– Mauritius: 12448 ; 1,283,415
– Micronesia: 0 ; 176,815
– Monaco: 80 ; 36,371
– Montserrat: no data ; 5,000
– Nauru: ; 13,000
– Netherlands: 1883690 ; 16,574,989
– Antilles: ; 197,041
– Niue: 0 ; 1496
– Panama:33587 ; 3,504,483
– Samoa: 4 ; 183,123
– San Marino: 84 ; 13,147
– Seychelles: 170 ; 86,525
– Singapore: 173271 ; 5,076,700
– St. Kitts and Nevis: 286 ; 51,300
– St. Lucia: 112 ; 174,000
– St. Martin: ; 77,741
– St. Vincent and the Grenadines:278 ; 125,000
– Switzerland: 712,622 ; 7,785,806
– Tonga: no data ; 103,365
– Turks and Caicos Islands: 902 ; 50,000
– Vanuatu: no data ; 245,036
– Establishing a corporation offshore:
– Three pieces of paper:
– A nominal director declaration states that the nominal director with a tax haven address will follow the direction of the firm’s real owner.
– An undated resignation letter allows the nominal director to duck liability.
– Power of attorney is granted to the corporation’s real owner.
– The Ugland House, one small building in the Cayman Islands is home to some 18,857 companies.
– The state of Delaware, with a population of 917,092, is home to some 945,000 companies, many of which are shells.
So you have a nominal owner, what happens then?
– Like Bidzina Ivanishvili, the Prime Minister of Georgia, you can buy Picasso’s “Dora Maar au Chat” for $95 Million, a full $35 million more than it is appraised for. Just because you want to.
– Also like Ivanishvili, you can provide 60,000 in your home region with free electricity and gas, build twenty schools, a stadium, and provide monthly bonuses to doctors and teachers.
– At $2 million for a 65′ yacht, the global private wealth in tax havens could fill the entire length of the Mississippi River 34.8 times.
In my long article in the first issue of Irish Left Review on Ireland’s corporate tax regime I made the point that Ireland in effect sells its abilities to make tax laws to profit hungry MNCs, in much the same way as it sells to the rights to our natural resources to large oil companies. That is, whatever economic benefit there is, and its small, goes to the ‘agents’ who negotiate the deal, with very little, if any, benefit appearing in the economy.
Recently these arrangements, known as the Double Irish with the Dutch Sandwich have been given a lot of attention and are often explained. For example, see this New York Times info graphic. However, while listening to Jim Stewart’s interview on Morning Ireland last Friday in a conversation about Google’s ‘grilling’ before the UK’s Public Accounts Committee on taxation, I found out that the ‘Dutch Sandwich’ is no longer used, and instead Google’s earnings from its EMEA market goes from Google Ireland to Google Ireland Holdings, which is registered in a solicitor’s office at 70 Sir John Rogerson’s Quay and also in Bermuda. So, by passing these to the Bermuda registered company, the earnings go straight to Bermuda. Google Ireland Holdings has no employees and is ‘owned’ by Google Bermuda which also has no employees. Both are unlimited companies, so under Irish law, they do not have to publish accounts.
via Irish Left Review.
via Irish Left Review.
INTRO BY JOHN DONOVAN: THIS ARTICLE IS ABOUT TAX DODGING, AN ACTIVITY IN WHICH SHELL HOLDS A BLACK BELT AND HAS DONE SO FOR MANY DECADES. NOTE THAT GERRIT ZALM IS ON THE ROYAL DUTCH SHELL PLC BOARD OF DIRECTORS. HE IS ALSO THE CHAIRMAN OF ANOTHER ALLEGED TAX DODGER, ABN AMBRO BANK N.V. HE IS UP FOR RE-APPOINTMENT TO THE RDS PLC BOARD NEXT MONTH. OBVIOUSLY A PERFECT FIT.
While the Netherlands has its own image as a tax haven, Dutch multinationals are masters at setting up their own companies in tax-free zones, the Volkskrant reported at the weekend.
Shell has 85 subsidiaries in six tax-free zones, while ABN Amro has 54 in five. Privately-held oil trading group Vitol has 17. Most companies, including Vitol, are reluctant to give out much information about their activities in tax havens, the VK said.
ABN Amro, now fully owned by the Dutch state, is a little more forthcoming. It says the tax haven subsidiaries are connected to special investment funds and investments in ships and there is ‘no question’ of tax evasion.
Others, such as Akzo Nobel, Unilever and Philips, said they are in the process of liquidating their interests in tax havens.
Shell told the paper it supplies all necessary information to tax offices and denies that the Cayman Islands and Bermuda are tax-free zones under OECD definitions.
This article was re-edited after its initial publication.