Forty U.S. corporations collectively reduced their 2025 tax bills by more than $11.5 billion in 2025 through the use of tax havens, according to an analysis by the FACT Coalition, a non-partisan group promoting a fair international tax system.
To conduct the analysis, FACT’s Thomas Georges and Zorka Milin relied on disclosures mandated by updated Financial Accounting Standards Board (FASB) rules. They say the disclosures provided a more detailed look at how large multinationals shift profits to low-tax jurisdictions, despite U.S. anti-abuse rules and minimum taxes.
New Transparency Rules Reveal Tax Haven Use
FASB’s Accounting Standards Update 2023-09 requires publicly traded companies to break out the impact of specific tax credits, U.S. and foreign tax policies, and the effect of individual jurisdictions on their total tax expense. These disclosures, which FACT says tax experts and investors long advocated for, are designed to clarify how companies’ global tax strategies impact their effective tax rates.
The new disclosures “have proven to be as useful as we were hoping,” Georges told Checkpoint. They’ve been helpful “both in terms of what they’re able to tell us about general trends in international corporate tax, but also in terms of … provid[ing] maximum benefit to investors.” Georges noted he’s spoken to investors who are finding the disclosures “very, very useful.”
FACT’s analysis found that tax-haven savings was concentrated among pharmaceutical and biotech companies. Ten companies – AbbVie, Biogen, Bristol Myers Squibb, Eli Lilly, Gilead, Johnson & Johnson, Merck, Pfizer, Regeneron, and Thermo Fisher Scientific – reported particularly high savings from tax havens, according to FACT.
The report also found that just four jurisdictions – Ireland, the Netherlands, Puerto Rico, and Switzerland – accounted for about 70% of all tax haven savings in FACT’s analysis. FACT notes that none of these jurisdictions are typically included on tax haven “blacklists” or “graylists.”
U.S. International Tax Rules Lacking
U.S. anti-abuse regimes such as global intangible low-taxed income (GILTI) and Subpart F are “deeply inadequate” at counteracting profit shifting, according to the report. FACT found that U.S. international taxes only “clawed back” $3 billion of the $11.5 billion in tax haven savings for the companies it analyzed.
On tax haven use, “many of these tax arrangements are, of course, perfectly legal,” said Georges. “In many ways, they’re incentivized by how the U.S. taxes the foreign profits of its multinational companies.” He stressed that “up until the beginning of 2026, we’ve had a rate on general foreign income that is half that of the statutory corporate domestic rate for domestic income.” That rate was “further watered down” by “a substance carve-out for tangible assets located abroad,” he added.
The One Big Beautiful Bill Act (OBBB) made some changes – such as removing the “substance carve-out” for tangible assets abroad – which Georges said he was “certainly surprised and glad to see.” However, overall, the OBBB’s international tax reforms “did not go far enough,” he said.
And the OECD’s Pillar Two 15% global minimum tax “is starting to take a bite out of the savings in some notorious tax planning jurisdictions,” said Georges. He explained that in Singapore, specifically, Pillar Two is “overriding agreements that individual companies have with the government that set preferential rates and other tax incentive effects.”
However, the U.S. “side-by-side” agreement with the OECD means that certain aspects of Pillar Two do not apply to U.S. corporations, the report explains. Georges said he “would like to see the United States tighten up its own rules … and come up at least to the standard of what is required under the minimum standard under Pillar Two.” Instead, said Georges, the U.S. is “watering down” comparable rules through regulatory guidance, including on the corporate alternative minimum tax (CAMT).
Legislative Outlook
In terms of whether and when the U.S. could further revise its international tax laws to address tax haven use, Georges sees potential – but added “we just are probably waiting for a different political environment.”
“There is, I think, bipartisan interest in how the Tax Code can level the playing field for medium-sized and domestic businesses with large multinationals,” Georges explained. However, he sees major legislative changes as unlikely in the current Congress.
In addition, Georges emphasized that “restoring the IRS’ budget, particularly for enforcement, is critical” to addressing profit shifting. But because many strategies remain legal, and are even incentivized by current law, structural changes to the Tax Code are also needed, said Georges.
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