How Tesla Saved Hundreds of MillionsFor years, the world’s richest man, Elon Musk, has been vocal about rejecting what he once called “shady” tax loopholes. Yet a recent Reuters investigation suggests that Tesla leveraged one of the oldest tricks in the multinational playbook: profit shifting. By routing roughly $18 billion in profits through subsidiaries in the Netherlands and Singapore, the automaker likely avoided at least $400 million in U.S. taxes.The mechanism is familiar to tax specialists. Tesla appears to have assigned intellectual property rights, think patents and proprietary tech, to offshore entities, allowing profits tied to those assets to be booked in low-tax jurisdictions. The Dutch unit, structured as a non-resident partnership with no employees, acted as a conduit, funneling earnings to a Singapore holding company that also paid no tax on the income. It’s all legal, and hardly unique, but it directly contrasts Musk’s public stance on tax avoida …
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Author: Leroy Marion
