12 Guilty Fogeys: Big Oil’s $86 billion offshore tax bonanza
Multinational firms often use complicated corporate structures and arcane provisions of the tax code to minimize or eliminate their global tax payments. Arcane changes in tax rules can give rise to big losses in tax revenues to country treasuries, as happened in the 2017 tax law passed under the Trump Administration, to the great benefit of oil and gas firms. Under this law, companies that extract oil and gas overseas enjoy special exemptions within the Global Intangible Low-Tax (GILTI) regime covering Foreign Oil and Gas Extraction Income (FOGEI). This carve-out is estimated to be worth $84 billion to a small number of large fossil fuel firms, companies the authors point out that are directly linked to the climate challenges the world now faces. An additional international tax loophole enjoyed by these large oil firms is worth at least another $1.4 billion, for a grand total of over $86 billion in offshore tax giveaways.