The new one Reuters The report alleges that Tesla used offshore entities to reduce its U.S. tax burden by at least $400 million, raising new questions about the automaker’s global financial structure. The analysis, based on extensive regulatory filings and expert reviews, shows that the electric vehicle maker diverted about $18 billion in profits through subsidiaries in the Netherlands and Singapore.
These findings contradict previous public statements from CEO Elon Musk, who criticized aggressive tax avoidance strategies. During a campaign appearance in 2024, Musk said, “I talk about these loopholes a lot… I thought, ‘That sounds pretty fishy. I don’t think we should be doing that.'” Neither Musk nor Tesla responded to requests for comment on the report.
According to ReutersTesla reported no federal income tax obligations in the United States in 2025. While past losses and green energy incentives explain some of the results, tax experts cited in the report suggest that shifting profits may be an additional factor. This mechanism appears to rely on intellectual property rights being granted to overseas subsidiaries, so that profits associated with those assets are recognized in jurisdictions with lower taxes than in the US.
Filings show that the Singapore-based entity, Tesla Motors Singapore Holdings, recorded billions of dollars in revenue channeled through its Dutch partnership, TM International. The entity reportedly has no employees and is not subject to Dutch tax. Experts who reviewed the structure concluded that it “almost certainly” served as a conduit for shifting profits. “This is entirely about shifting profits to low-tax jurisdictions,” said University of Michigan law professor Reuven Avi-Yonah.
Reuters found no evidence that Tesla violated any laws. Profit shifting remains a common, if controversial, practice among multinational companies. However, the scale of the expected savings is quite large, especially considering Tesla’s large US revenue base.
Tesla’s latest annual filing shows potential changes. More than 90 percent of its global profits were reported in the United States in 2025, a sharp increase from previous years. The company did not explain the changes, and it remains unclear whether the offshore structure has been changed or discontinued.
Even if revised, experts say the previous arrangement would likely provide lasting tax benefits.
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