Senator Ron Wyden, the ranking Democrat of the Senate Finance Committee, on Tuesday requested detailed information on how the four biggest accounting firms use Malta to help multinational companies based in the United States dodge billions of dollars in taxes.
The New York Times reported in August that big companies are setting up subsidiaries in Malta, often in empty offices, to shield their profits from taxes around the world. Companies including Crocs, Victoria’s Secret, Abbott Laboratories and Thermo Fisher have used the tiny archipelago to exploit its near-zero effective corporate tax rate, shifting taxable profits away from countries where they have actual employees and customers.
The Big Four accounting firms — KPMG, Deloitte, EY and PwC — have advised companies on the arrangements, engineering schemes to cut their clients’ tax bills by navigating the differences in tax laws of various countries.
KPMG declined to comment. Deloitte, EY and PwC did not respond to requests for comment.
“While working-class Americans dutifully pay taxes on every paycheck, sophisticated accountants and tax lawyers are devising clever strategies for corporate giants to continue exploiting offshore tax havens to avoid paying their fair share,” Mr. Wyden, of Oregon, wrote in a letter to each of the firms.
The letter requested descriptions of the firms’ Malta strategies, along with copies of “presentations, slide decks or other marketing materials” for corporate tax strategies using Malta. It also asked for documents specifying how much companies saved in taxes, as well as details of fees for devising or marketing such tax strategies and the number of clients that have used them.
Malta, the smallest country in the European Union, said in 2023 that it would delay until 2029 a minimum corporate income tax that dozens of countries had adopted as part of an international crackdown. President Trump withdrew the United States from the enforcement effort on his first day back in office, boosting Malta’s appeal as a tax haven.
The number of Maltese subsidiaries set up by U.S. companies has risen about 70 percent over the past three years, public records show.
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