As Reuters reminds, in January this year Tesla published a report for American regulators, according to which it had to pay “zero dollars in tax” in 2025. Similar information has appeared, with few exceptions, over the past two decades. The analysis of documents carried out by journalists shows that Tesla probably moved about $18 billion abroad. profits, saving at least USD 400 million. on US taxes.
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Tesla's way to save money
The most obvious reason for Tesla's savings is tax deductions related to the company's losses incurred over a decade without profits. Green energy tax credits offered by the federal government also helped.
But that's not all. A review of the company's and foreign companies' corporate reports reveals another, previously undisclosed way to make big savings. It's about shifting profits abroad. Tesla's units in the Netherlands and Singapore have made profits of $18 billion in recent years, which were not taxed in those countries. Without this particular financial maneuver, these gains would likely be reported and taxed in the United States.
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As Reuters highlights, profit shifting is a common corporate cost-cutting tactic, with no indication that any regulations are being circumvented. On the other hand, Tesla has never publicly admitted to profit shifting or explained what its Dutch and Singapore units are used for in terms of tax planning.
Neither the company nor Elon Musk himself responded to Reuters' questions, nor did the US tax office.
This practice, although controversial, is a common way of exploiting loopholes in tax law to save money, although according to expert Stephen Shay, former deputy secretary for international tax affairs in the US, “the international tax system should not work this way.”
“It's all about redirecting profits to low-tax jurisdictions,” Reuven Avi-Yonah, a tax law professor at the University of Michigan, told Reuters.
