The Tax Times: $11.5 Billion Saved: What New Tax Transparency Rules Show About Corporate Tax Havens

U.S. multinationals used new FASB-mandated tax disclosures to reveal that 40 large corporations cut their 2025 tax bills by over $11.5 billion through profit shifting to low‑tax jurisdictions, especially in pharma and biotech, according to a FACT Coalition analysis.

Key findings

FACT reviewed 2025 financials under FASB ASU 2023‑09, which requires public companies to disaggregate income tax expense by jurisdiction, tax credits, and policy effects, making effective tax rate drivers much more transparent to investors. FACT’s review shows that ten pharma/biotech companies, including AbbVie, Merck, Pfizer, Johnson & Johnson, and others, reported especially large tax savings attributable to tax haven jurisdictions. Four locations—Ireland, the Netherlands, Puerto Rico, and Switzerland—accounted for about 70% of all identified tax‑haven savings, even though they rarely appear on formal blacklist or graylist compilations.

Limits of current U.S. rules

The report concludes that existing U.S. anti‑abuse regimes, including GILTI and Subpart F, are inadequate because they recaptured only about $3 billion of the $11.5 billion in tax‑haven savings for the 40 corporations examined. Georges notes that, through the start of 2026, general foreign income was effectively taxed at about half the domestic statutory corporate rate and further reduced by a “substance carve‑out” for foreign tangible assets, which encouraged profit shifting within the bounds of current law. The One Big Beautiful Bill Act removed this substance carve‑out and made some tightening changes, but FACT argues that the overall international reforms still leave ample room for aggressive tax planning.

Interaction with Pillar Two and CAMT

OECD Pillar Two’s 15% global minimum tax is starting to erode tax incentives in some jurisdictions, such as Singapore, where minimum‑tax rules are overriding company‑specific preferential deals. However, aspects of the U.S. “side‑by‑side” implementation mean that certain Pillar Two provisions do not fully apply to U.S. multinationals, while domestic rules like the corporate alternative minimum tax have been weakened through recent regulatory guidance. Georges urges the U.S. to at least meet the Pillar Two minimum standard by tightening its own regimes rather than diluting them.

Policy and enforcement outlook

Georges sees bipartisan interest in “leveling the playing field” between large multinationals and purely domestic or mid‑sized businesses, but he does not expect major reforms in the current Congress. He emphasizes that stronger IRS funding—particularly for enforcement—is necessary to police abusive structures, yet many strategies highlighted in the FACT study are legal and even incentivized, so structural Tax Code changes will also be required to materially curb profit shifting.

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