Gustavo Ballvé on March 25th, 2011
Capital goods, Corporate Strategy, Food for thought, Home, Industries, Investment Themes, Portfolio Management, Risk management, Signal or Noise

We have had for years a section in our Intranet on Tax legislation and another on interesting corporate structures that save money in any way – operationally, fiscally, etc. The overall idea is to study the state-of-the-art in all espects of corporate life – it’s useful to understand companies’ performances/ strategies/ cultural aspects, and if it’s good it can eventually be shown to companies we invest in. Of course, in the case of tax practices there’s a thin line between aggressiveness and innovation and falling into regulatory traps… Reading this NYT article out today, we still have no idea where GE fits in this range, but it’s safe to say that they’re certainly innovative in the tax department.

Here’s a series of charts by the New York Times showing how GE works its magic:

NYT charts on GE's tax "voodoo"

NYT charts on GE's tax "voodoo"

As the NYT said:

“Some comparable data is not available before 2004 because of the changes in G.E.’s regulatory filings.

Source: General Electric’s financial statements”

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