US companies have avoided at least $40 billion in taxes since early 2025 after the Trump administration withdrew from an international effort aimed at curbing offshore corporate tax avoidance, according to a report by The New York Times.
The report says hundreds of multinational companies shifted profits to low-tax jurisdictions such as Malta, Bermuda, Cyprus, the Cayman Islands, and Switzerland — often through subsidiaries with few or no employees, offices, or business operations.
The move followed President Donald Trump’s decision to exit the OECD-backed global minimum tax framework, known as Pillar 2, on his first day back in office. The agreement had sought to impose a 15% minimum corporate tax rate worldwide to discourage profit shifting to tax havens.
According to the report, companies across nearly every major sector used offshore structures to significantly reduce their tax bills. Among those named were American Express, PayPal, Walmart, Uber, PepsiCo, Honeywell, and Abbott Laboratories.
The report highlighted Malta as a major destination for tax savings. It alleged that Abbott Laboratories routed global profits through a Maltese subsidiary with no employees, helping reduce its tax bill by hundreds of millions of dollars.
The analysis was based on new disclosures in corporate SEC filings that require public companies to reveal tax savings linked to foreign jurisdictions.
Critics argue that the administration’s withdrawal from the global tax agreement has weakened efforts to prevent aggressive offshore tax planning and opened the door for companies to expand such practices.
The report also noted that some firms benefiting from offshore tax structures receive substantial US government funding, including defense contractors and healthcare companies.
While many of the tax strategies described are legal under existing laws, the Internal Revenue Service has reportedly challenged some arrangements, arguing that certain transactions lack economic substance or amount to abusive tax avoidance schemes.