Courtesy of The Tax Justice Blog.
According to Institute on Taxation and Economic Policy Executive Director Matt Gardner,
“On paper, at least, the Cayman Islands is an economic powerhouse. The latest data from the Internal Revenue Service show that U.S.-based corporations claim that their subsidiaries earn $51 billion a year there, an astonishing figure for an island nation that has a population of just 59,000.
But official statistics peg the size of the entire Caymans economy at just $3 billion a year. Put another way, for every $1 of economic activity that occurs in the Caymans, American corporations are telling the IRS that they earn $16.
The only visible indicators of handsome corporate profits are a number of low-slung, nondescript buildings that dot the country’s small capital, George Town. Seldom more than a few stories high, these modern buildings have virtually no in-and-out traffic, giving the impression that all are closed for an extended holiday. The most infamous of these is Ugland House, the building in Grand Cayman where 18,000 corporations claim they have subsidiaries. President Barack Obama drew attention to it in 2009, when he joked that it was either ‘The largest building in the world or the largest tax scam in the world.’
Just a stone’s throw away from these Potemkin office buildings, in which Bank of America alone disclosed basing 143 subsidiaries in its 2013 annual report, chickens casually wander across unpaved streets lined with broken-down cars.” Read at the source.