US multinationals' $25bn Bermuda profit - Royal Gazette

US multinationals’ entities in Bermuda declared profits of $24.9 billion in 2016 — or $45 million per employee.

That is the finding of the US tax authority, the Internal Revenue Service.

In its latest country-by-country statistics, the IRS breaks down what reporting entities in different countries are making and how many staff they employ.

The staggering profit attributed to Bermuda is more than the $19.1 billion reported by US multinational entities in China and greater than the totals from France, Germany and Italy combined.

It is likely, however, that the island’s number was skewed by the presence of an entity belonging to Alphabet, parent company of internet search-engine giant Google.

Bloomberg News reported last year that Google moved $19.2 billion to its Bermudian company, which employs no one on the island, to shield a large portion of its global profits from taxation.

The IRS data showed there were 229 reporting multinational groups with 1,099 entities resident in Bermuda. Of those, 470 were companies whose main business activity was holding shares or other equity instruments.

Only 45 were in regulated financial services, while 82 were in manufacturing or production, 58 in administrative, management or support services and 189 were described as dormant.

In terms of low-tax jurisdictions, the profits reported from Bermuda were a little greater in 2016 than the $23.8 billion attributed to the Cayman Islands.

The Caymanian entities had 3,139 employees, meaning their profit amounted to about $7.6 million per employee.

In Europe, two countries whose tax regimes have proved popular with US multinational groups were where the highest profits were announced in 2016. Profits of $31.39 billion were reported in Ireland and $37.6 billion in the Netherlands.

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