Tax systems are webs woven to trap profits where they are generated, but multinationals have learned to navigate their threads and escape through some holes. Spain lost almost $33 billion in corporate taxes between 2016 and 2021 due to “abuse” and “tax avoidance” by large companies. This is what the report says State of Tax Justice 2025, published this week by the Tax Justice Network, an international network of researchers and activists studying the effects of tax evasion globally. The study estimates that in those years the country stopped collecting a total of 32,982 million dollars – around 31 billion euros at the exchange rate – due to strategies for transferring profits to tax havens and more permissive tax jurisdictions. Of this amount, approximately 3.2 billion correspond exclusively to multinationals based in the United States.
The document, prepared on the basis of data from country-by-country reports compiled by the Organization for Economic Co-operation and Development (OECD), estimates that multinationals present in Spain declared $131.93 billion in profits outside the country that they had obtained in Spanish territory. In the case of large American companies, these displaced profits amounted to 12,858 million.
The fiscal loss associated with all these movements in Spain is equivalent, according to the organization’s calculations, to 5.7% of the entire national health expenditure. In turn, it corresponds approximately to what the Ministry of Finance collects in a year through corporate tax.
Spain, of course, is not the only one affected. The hole reached 53.5 billion in European jurisdictions such as the United Kingdom, 20.8 billion in the Netherlands, 22 billion in Italy, 109 billion in Germany and 116.8 billion in France. In Asia it reached 88 billion in India and 41 billion in China. Already in America some of the big holes have been noticed in Mexico (45,000 million), Brazil (38,000 million) and the United States (573,000 million), which however partially circumvent these effects thanks to a sort of paradox. The world’s leading economy loses more tax revenue than any other country because its multinationals pay very little on its soil, but at the same time it attracts benefits from elsewhere thanks to low rates and benefits created by the first Donald Trump administration’s tax reform.
To try to fill all these gaps, OECD countries have agreed to set a minimum tax of 15% for multinationals with an annual turnover exceeding 750 million euros. Donald Trump’s US administration recently withdrew from the pact, but some countries, such as those that make up the EU bloc, have agreed on a minimum rate on the adjusted accounting result. Spain implemented the community directive at the end of 2024.
Large multinationals manage to reduce their tax burden thanks, above all, to the transfer of profits to certain territories that grant preferential treatment to profits. Companies report their returns not where they are generated, but in jurisdictions with very low or no taxes, known as tax havens or tax havens. The report compares profits reported by companies to actual economic activity – employment, sales or tangible assets – in each country and finds that the portion of profits unrelated to that activity has been passed on for tax purposes.
American multinationals are at the forefront of these practices. Between 2016 and 2021, they shifted the equivalent of 24% of their global profits abroad, compared to 17% for multinationals in the rest of the world. The organization estimates that U.S.-based companies caused about $495 billion worth of losses worldwide during that period. Of this amount, the United States itself stopped receiving 271 billion, while the rest of the world took on the remaining 224 billion.
The study links the increase in global losses with US fiscal policy after the passage of the Tax Cuts and Jobs Act in 2017, when Donald Trump first arrived in the White House. The law reduced the corporate tax rate from 35% to 21% and made the United States, according to the document, a new preferred destination for corporate profits. Multinationals repatriated some of their profits, but at a much lower effective rate, so revenue fell even as reported profits increased.
The report suggests that the country has become a tax haven for its companies, which now pay less tax than before and continue to erode the tax bases of other territories. “American companies used Trump’s tax reform to stop hiding their profits in some offshore tax havens and instead use the United States as a tax haven, which offered equally, if not more, favorable conditions,” the document highlights.
And it puts some data on the table, with a focus above all on large American technology companies. Companies like Google, Amazon or Meta in 2016 incurred an effective tax rate of around 31% in their home country, but in 2024 it has dropped to a range between 8.4% and 15.9%. Apple had a tax rate of 66.8% in 2016 and eight years later it dropped to 8.5%, according to the filing.
In addition to profit shifting, the report identifies other mechanisms that expand tax avoidance. Many multinationals transfer ownership of their intangible assets, such as patents, trademarks or copyrights. softwareto low-tax territories, which allows them to register there the benefits they generate in other countries thanks to these tools and rights. Others use inter-affiliate payments, such as interest, royalties or internal services, to shift profits and exploit regulatory loopholes.
The Tax Justice Network also highlights the role of financial opacity and the lack of automatic exchange of information: the United States’ refusal to adhere to the OECD international standard has made the country the main destination for the hidden riches of large fortunes. Added to this are the preferential tax regimes in some jurisdictions and the influence of lobby companies that, according to the report, managed to stop the rules of transparency and publication of accounting data.
On a global scale, tax losses resulting from all these practices reached $1.7 trillion over the period analyzed. The organization also calculates that if the requirement to publish country-by-country reports – detailing benefits, taxes paid and number of employees in each jurisdiction – had been enforced during that period – states would have recovered about $475 billion in taxes, 27.6% of what they lost.
