Foreign travel is popular with Americans, and not just tourists. Those trying to avoid U.S. taxes are also quite fond of places like Bermuda and Ireland because of the “vacations” they provide American corporations with getting away from the Internal Revenue Service (IRS).

The top 12 destinations for American businesses that stash income overseas to avoid paying U.S. income taxes include the island paradises of Bermuda, Cayman Islands, British Virgin Islands, Bahamas, Netherlands Antilles and Barbados, according to Citizens for Tax Justice. Four of the remaining six are in Europe: Luxembourg, Ireland, Netherlands, Cyprus and Switzerland. The last is Singapore.

U.S. companies have hidden so much of their profits in foreign bank accounts that the sums in question are more than the entire gross domestic products of some of these tax-haven nations.

In the case of Bermuda, American subsidiary profits banked away on this Atlantic island represent 1643% of its GDP. The number is so high because the American profits total about $94 billion, while Bermuda’s economy only puts out about $6 billion a year. In the Cayman Islands, the disparity is nearly the same: 1600% ($51 billion profits v. $3 billion GDP).

Similarly, the British Virgin Islands rate is 1102% ($10 billion profits v. $1 billion GDP). In the Bahamas and Luxembourg, the disparity is only 123% and 106%, respectively.

 “It is obviously impossible for American corporations to actually earn profits in a given country that exceed that country’s total output of goods and services,” Citizens for Tax Justice said. “Clearly, American corporations are using various tax gimmicks to shift profits actually earned in the U.S. and other countries where they actually do business into their subsidiaries in these tiny countries.”

In terms of total profits of U.S. subsidiaries held overseas, the leaders are Netherlands at $127 billion, Bermuda with $94 billion and Ireland at $87 billion.

-Noel Brinkerhoff

To Learn More:

American Corporations Tell IRS the Majority of Their Offshore Profits Are in 12 Tax Havens (Citizens for Tax Justice)

Offshore Tax Havens Cost U.S. $184 Billion in Revenue Every Year (by Noel Brinkerhoff, AllGov)