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Saturday, May 15, 2010

Transocean dodges paying U.S. corporate taxes by locating its headquarters in Switzerland.

Transocean, Ltd, the company that operates the Deepwater Horizon oil rig which recently exploded in the Gulf, is the “world’s biggest offshore drilling contractor.” The AP reports today that Transocean, after moving its headquarters from the U.S. to Zug, Switzerland, two years ago, paid a paltry 16 percent on its corporate income last year, less than half of the current American corporate income tax rate of 35 percent:
In the foothills of the Swiss Alps four new steel-gray towers rise from what used to be a grassy field. One of them is home to Transocean Ltd., the world’s biggest offshore drilling contractor and owner of the Deepwater Horizon rig that exploded in the Gulf of Mexico, leading to one of the worst oil spills in history.
Low taxes prompted the decision two years ago to move to landlocked Switzerland: The company paid 16 percent tax on its $4.4 billion global operating income last year. The regular corporate income tax in the United States stands at about 35 percent.
The company, once based in Delaware, shifted its head office from the Cayman Islands, where it has been since 1999, to the central Swiss canton (state) of Zug. It joined other international corporations flocking there in search of tax advantages.
Only a dozen of Transocean’s employees are physically located in Zug — more than 1,300 are based in Houston, Texas. A “2005 survey by research firm BAKBASEL found Zug had the lowest effective tax burden for companies and high earners of any Swiss canton, and far below that of other European countries or the United States.” Transocean is holding its shareholder meeting in Zug today, angering some residents. “We want them to stop deepwater drilling and to clean up the damage they caused in the Gulf of Mexico,” said Rupan Sivaganesan, a Green Party member of the cantonal parliament. LinkHere


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