For sheer ingenuity, you can't beat Silicon Valley -- especially at outsmarting the taxman. By selling intellectual property (IP) rights to sock-puppet subsidiaries, tech giants shift profits to low-tax nations such as Ireland. But that's just a start.
Sublicense the IP to a second Irish unit that books global sales, have entity B pay onerous royalties back to A (wiping out its earnings), then show that A is headquartered in the Caribbean, making its royalty income untaxable in Ireland. Slick! One problem: until the US tax service gets its cut, the companies can't use the cash back home. Not so genius after all.
This article was originally published by WIRED UK
