NGOs criticise Transocean for move to low tax Switzerland

28th May 2010, Comments 0 comments

Non-governmental groups criticised Transocean, which owns the BP-leased offshore rig gushing oil into the Gulf of Mexico, on Friday for moving recently to Switzerland where it benefits from low taxes.

Founded in 1919 in the United States' Louisiana, Transocean, the company which is the world's biggest offshore drilling contractor, was based in the Cayman Islands before its move in 2008 to Zug, a canton in central Switzerland.

"The Cayman Islands is under the scrutiny of the United States because of their tax policies, which has pushed companies like Transocean to come and set up in Switzerland," said Andreas Missbach, from the NGO Berne Declaration.

Although 10 executives are based in Vernier, close to Geneva, the company is incorporated in canton Zug, which offers one of the most attractive tax rates in Switzerland.

A spokesman said that the company, which counts 35 employees in Switzerland out of a total staff strength of 18,500 worldwide, had moved to Zug "to maintain a competitive corporate tax rate and to be more geographically centered within our worldwide operations."

For Tom Mayne from Britain-based NGO Global Witness: "There are two reasons for companies of this sector to set up in Zug -- for taxes and for the little amount of information that they would have to reveal on the structure of their company."

Canton Zug, which is home to a host of commodities firms such as Xstrata, Glencore, Nord Stream and Rosukrenergo, is a "tax paradise for these groups, including many which have just a letterbox," added Missbach.

The NGOs estimate that holdings like Transocean pay cantonal taxes of just 0.002 percent per 1,000 francs of capital and are exempted from taxes on revenues.

A federal tax of just 8.5 percent is imposed on profits, while revenues earned abroad are deductible, added the NGOs.

Given that the company's revenues are mostly generated through offshore oil rigs abroad, much of these would be tax deductible.

NGOs also pointed out that the profits of companies such as Transocean are therefore not redistributed in taxes to the countries from which they have extracted the commodities.

© 2010 AFP

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