Accenture Lobbies Against US Moves On Offshore Companies

by Leroy Baker, Tax-News.com, New York

08 August 2002

Consulting firm Accenture is fighting for the right to retain lucrative government contracts as Congress seeks to ban federal agencies from doing business with US companies which have relocated offshore to minimize taxes, according to a report in the New York Times on Wednesday.

Anti-offshore campaigner, David Cay Johnston, and fellow NY Times correspondent Jonathon Glater, reporting on Accenture's campaign to distance itself from other firms which have recently performed corporate inversions to low tax locations, alleged that despite claiming to be higher taxed than the average, before last year, the consulting firm paid very little in taxes, US or otherwise.

Director of Corporate Communications, Roxanne Taylor told the newspaper this week that: 'Accenture never was an American company,' and explained that the organization (formerly Anderson Consulting) was never 'reincorporated' in Bermuda, but is in actual fact something of a 'virtual corporation', with upwards of 2,500 stock-owning partners in 47 different countries.

Fearful of losing some $684 million in revenue from government contracts (including the running of the IRS website, and a six year contract with the US air force), Accenture's lobbyists are keen to persuade politicians that Accenture's reasons for locating its headquarters in Bermuda have been misunderstood.

'We picked Bermuda because we wanted a neutral country,' an unnamed senior executive explained to the two reporters.

The New York Times article then went on to suggest that the company's 38% tax rate was due to an unusual set of circumstances - namely falling profits due to reorganization, and the cessation of various US tax deferrals as a result of its Bermuda incorporation - and was abnormally high compared to other years.

Recommended