For sheer ingenuity, you can't beat Silicon Valley-especially at outsmarting the tax man. By selling intellectual property rights to sock-puppet subsidiaries, tech giants shift profits to low-tax nations like Ireland. But that's just a start. Sublicense the IP to a second Irish unit that books global sales, have entity B pay onerous royalties back to A (wiping out its earnings), then show that A is headquartered in the Caribbean, making its royalty income untaxable in Ireland. Slick! Only problem: Until the IRS gets its cut, the companies can't bring the cash back home to use it. Hmm... not so genius after all.
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