Tesla (NASDAQ: TSLA), the electric vehicle giant, has reported zero federal tax liability in the United States for each of the last twenty years, except 2023, despite generating U.S. revenues of $264 billion over the past two decades. A detailed analysis conducted by Reuters reveals the company likely saved over $400 million in U.S. taxes by shifting $18 billion in profits through subsidiaries in the Netherlands and Singapore between 2023 and early 2025.
This profit-shifting strategy, a common corporate tactic, involved routing earnings through Tesla units like TM International, a Dutch partnership with no employees or tax obligations in the Netherlands, and Tesla Motors Singapore Holdings, which reported the massive profits while selling just 6,633 cars during the period.
These profits represented 89% of Tesla’s global operating income for those years, despite U.S. sales historically accounting for roughly half its turnover. The maneuver appears tied to a decision early last decade to move intellectual property rights offshore, allowing income once taxable in the U.S. to be reported in low-tax jurisdictions.
Tax experts estimate that Tesla’s structure reduced its U.S. tax burden significantly, leveraging a headline corporate tax rate of 21% and unapplied tax breaks stored from prior years. “It’s entirely about shifting profits to low-tax jurisdictions,” said Reuven Avi-Yonah, a tax law professor at the University of Michigan. Over the years, Tesla has reported foreign tax liabilities of $6.4 billion, dwarfing the sole U.S. tax estimate of $48 million for 2023.
The company’s filings offer little clarity on the operations of these overseas units. Tesla Motors Netherlands, based in Amsterdam, reported annual revenues of $28 billion in 2023 and 2024, nearly 30% of Tesla’s total turnover each year, yet its role in the profit shift remains opaque. An executive at the Amsterdam site, Stephan Werkman, EU Finance Director, noted that all decisions, including tax structures, are made from Tesla’s headquarters in Austin, Texas.
A potential shift may be underway, however. Tesla’s latest annual report for 2025 disclosed that over 90% of its global profits were earned in the U.S., a sharp rise from just 27% between 2020 and 2024. While no explanation was provided, experts suggest this could indicate a change in the offshore structure that funneled profits to the Dutch and Singaporean subsidiaries.
Elon Musk, Tesla’s CEO and largest shareholder, has publicly dismissed suggestions of exploiting tax loopholes, claiming during a 2024 campaign event in Pennsylvania that he often rejects such proposals as “pretty shady.” Despite this, the scale of the profit shift counters assertions that his businesses pay their fair share in the U.S., especially as Musk has voiced concerns over the federal budget deficit while advising President Donald Trump on government spending cuts.
Tesla’s history of minimal U.S. tax obligations isn’t new—only once since its 2003 founding has it reported a federal tax estimate, the $48 million for 2023. Whether that amount was paid remains unclear due to past regulatory reporting rules. What is evident is the stark contrast between Tesla’s domestic tax record and the billions in profits parked overseas, raising questions about the long-term sustainability of such strategies amid growing scrutiny of corporate tax practices.
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