US Corporations Evade $40 Billion in Taxes Post-Trump Administration Withdrawal

A recent report uncovers that US companies have evaded more than $40 billion in taxes since 2025 by shifting profits to low-tax jurisdictions. This trend follows the Trump administration's withdrawal from a global tax agreement aimed at curbing offshore tax avoidance. Major corporations like American Express, PayPal, and Abbott Laboratories are implicated in these practices, which critics argue undermine efforts to prevent aggressive tax planning. The analysis highlights the legal complexities surrounding these strategies and the potential challenges posed by the IRS. Discover the full details of this significant tax issue affecting the US economy.

By Narendra Chaudhary May 30, 2026, 02:01 IST

Tax Avoidance Strategies of US Corporations

Since early 2025, American corporations have managed to evade over $40 billion in taxes following the Trump administration's exit from a global initiative aimed at reducing offshore tax evasion, as reported by a leading news outlet. The investigation reveals that numerous multinational firms have redirected profits to low-tax regions like Malta, Bermuda, Cyprus, the Cayman Islands, and Switzerland, frequently utilizing subsidiaries that operate with minimal or no workforce, offices, or actual business activities.

This trend emerged after President Trump opted out of the OECD-supported global minimum tax framework, known as Pillar 2, on his first day back in office. This agreement aimed to establish a 15% minimum corporate tax rate globally to deter profit shifting to tax havens.

The report indicates that companies from nearly every significant industry have employed offshore strategies to drastically lower their tax obligations. Notable firms mentioned include American Express, PayPal, Walmart, Uber, PepsiCo, Honeywell, and Abbott Laboratories.

Malta has been identified as a key location for tax savings, with allegations that Abbott Laboratories funneled global profits through a Maltese subsidiary that has no employees, significantly slashing its tax liabilities by hundreds of millions.

This analysis is based on recent disclosures in corporate SEC filings, which mandate public companies to disclose tax savings associated with foreign operations. Critics contend that the withdrawal from the global tax agreement has undermined efforts to combat aggressive offshore tax strategies, allowing companies to broaden such practices.

Furthermore, the report highlights that several firms benefiting from these offshore tax arrangements also receive considerable funding from the US government, including defense contractors and healthcare providers. While many of the tax strategies outlined are legal under current regulations, the Internal Revenue Service has reportedly contested some of these arrangements, claiming that certain transactions lack genuine economic substance or constitute abusive tax avoidance schemes.