Key takeaway - Tesla reported a zero federal tax liability for 2025 in its annual filing to U.S. regulators in January. While a long history of previous losses and U.S. clean-energy tax incentives have been cited as drivers of a low U.S. tax bill, a detailed examination of corporate filings and subsidiary reports indicates a separate channel of tax savings tied to foreign units in the Netherlands and Singapore.
Regulatory documents and subsidiary disclosures show that Tesla-related entities in the Netherlands and Singapore posted roughly $18 billion in profits between 2023 and early 2025 that were not subject to tax in those countries. The structure and disclosures surrounding those units are consistent with a profit-shifting strategy that could have diverted income that otherwise would have been taxed in the United States.
What the filings reveal
Company filings indicate that a Singaporean entity, Tesla Motors Singapore Holdings, received about $18 billion in profit from TM International, a Dutch unit in which the Singaporean company holds more than 99% ownership. TM International is registered in the Netherlands as a non-resident partnership. Dutch registry entries show the partnership lists no employees and is not required to file financial statements or pay taxes in the Netherlands.
The Singapore filings similarly do not show taxation on the income derived from the Dutch partnership. Neither Dutch nor Singapore regulatory filings detail the partnership’s operations, its relationships with Tesla sister units that manufacture and distribute vehicles, or the mechanics by which the partnership generated its reported profits.
Those structural features - a partnership with no local employees and minimal public reporting obligations that funnels large profit figures to a related offshore holding - are, according to tax experts who reviewed the filings, consistent with arrangements intended to allocate earnings to jurisdictions with lower or no tax on that income.
How profit shifting appears to have worked
The filings and expert commentary point to an early-decade decision to transfer rights to certain intellectual property - patents or know-how related to Tesla products - to one or more foreign subsidiaries. That transfer would permit income attributable to the use of that intellectual property to be booked in places where tax treatment is more favorable than it would be if the same income were reported in the United States.
Regulatory disclosures show Tesla disclosed a so-called cost-sharing arrangement in its 2015 annual report with unspecified foreign subsidiaries. The timing and exact terms of that arrangement are not publicly specified in the filings reviewed. The combination of that cost-sharing language and the later pattern of profits flowing through the Dutch partnership and into the Singaporean owner aligns with the mechanism by which corporate groups reallocate earnings across borders.
Expert assessment
Three noted tax experts who examined the filings and the underlying calculations concluded that the pattern of reported profits and the corporate structure make it highly likely that the Dutch partnership functioned primarily as a conduit to allocate profits to low-tax jurisdictions. One of those experts described the arrangement as "entirely about shifting profits to low-tax jurisdictions." Another characterized it as not being in keeping with how an international tax system ideally should operate.
Those consulted further agreed that, while the filings and descriptions do not indicate illegality, the structure is a commonly used corporate tax-planning tool that reduces where taxable income is recognized. The experts also noted that because of the varied disclosure requirements in different countries, tracing the cross-border flow of earnings can be complex and opaque even for specialists and tax authorities.
Size and tax impact
The partnership in the Netherlands and the Singapore entity together reported about $18 billion of profit over the relevant recent period. Tax specialists who reviewed the structures estimated that the profit-shifting likely reduced Tesla’s U.S. tax bill by at least $400 million. That estimate uses a headline U.S. corporate tax rate of 21%, assumes continued profitability at Tesla, and accounts for the presence of stored-up tax breaks the company has not yet applied.
Those stored-up tax breaks matter because the profit-shifting reduced Tesla’s taxable base in the United States in recent years, leaving credits and deductions unused and therefore available to offset future taxable income once the company faces U.S. tax liabilities.
How this fits with Tesla’s reported U.S. tax history
Tesla has long reported minimal U.S. federal tax obligations. In the company’s January filing it disclosed a zero federal tax charge for 2025. For all but one of the past 20 years, during which Tesla reported roughly $264 billion in U.S. revenues, the company has stated it owed no U.S. federal tax. The most frequently cited explanations for that record are the extended period during which Tesla ran losses before becoming consistently profitable and the availability of U.S. green-energy tax credits and other incentives.
Only once - for a 2023 estimate - has Tesla reported an expected annual U.S. federal tax liability in the filings reviewed. For 2023 the company disclosed an expectation to owe $48 million to the federal government. The public filings do not clarify what specifically made 2023 different, whether that $48 million was ultimately paid, or whether other tax payments were made to the federal government before 2025.
The company’s regulatory disclosures also show cumulative foreign tax liabilities since its founding amounting to $6.4 billion - more than 130 times the single U.S. tax estimate disclosed for 2023 - despite U.S. market sales historically representing roughly half of the company’s turnover across many reporting years.
Local operations and on-the-ground presence
Many of Tesla’s overseas operations are channeled through Tesla Motors Netherlands, headquartered at 122 Burgemeester Stramanweg in southeast Amsterdam. The building - a grey-and-red metal-clad structure bearing Tesla branding - houses a retail showroom, a repair shop and a small number of offices. Tesla Motors Netherlands reported annual revenues near $28 billion in both 2023 and 2024, representing nearly 30% of the consolidated company’s turnover in each of those years.
It is not clear from the filings how or what share of those revenues corresponded to the $18 billion of profit recorded by the partnership that flowed to the Singaporean unit. An executive on site in Amsterdam stated that corporate decisions, including tax structure management, are handled at the company’s U.S. headquarters, saying "Everything is decided in Austin." The executive identified himself as the EU finance director in public statements and on a professional networking profile.
Regulatory and company responses
Public filings and the available documentary record do not show that Tesla’s tax arrangements violate applicable law. The companies involved and the national tax authorities in the Netherlands and Singapore cited confidentiality rules and declined to provide public comment on the tax specifics of the units reviewed. Company spokespeople did not provide additional explanation in response to requests for comment.
The structure and disclosures differ in the level of transparency they offer. Dutch registration records list certain partnership entities as non-resident and thereby exempt from local tax reporting obligations. Singaporean filings examined do not indicate taxation on the partnership-derived income posted to Tesla Motors Singapore Holdings.
Possible structural changes and recent disclosures
There is an indication in Tesla’s most recent annual report that the company’s geographic allocation of profits may have shifted. The 10-K filed in January disclosed that more than 90% of the company’s global profits in 2025 were earned in the United States. By contrast, across the previous five-year span beginning in 2020 - the first full year Tesla posted a profit - the United States accounted for only 27% of global profits according to company reports for that period.
The January 10-K does not explain why the U.S. share of global profits rose so sharply nor does it describe any operational or structural change that would account for the shift. Tax experts who examined the filings suggested one plausible explanation could be that Tesla recently altered the offshore arrangements that previously allowed Dutch and Singaporean subsidiaries to report billions in profit. The available public record does not make it possible to determine whether any such change has materially affected the two units’ recent income streams.
Context within broader tax debates
Tax authorities and lawmakers have long scrutinized cross-border cost-sharing arrangements and intellectual property transfers because they can be used to reassign taxable income across jurisdictions. The filings for the Dutch partnership and Singaporean holding, together with Tesla’s earlier disclosure of a cost-sharing arrangement, mirror elements regulators and analysts flag as potentially enabling the reallocation of income to jurisdictions with lighter tax obligations.
Separately, the filings underscore how publicly available information varies across national registries and how such variance can complicate efforts to map a multinational corporation’s true global tax footprint. The experts who assessed the case underscored that apparent profit shifting is common among large multinationals and that it can be difficult to trace without comprehensive cross-jurisdictional transparency.
Conclusion
The corporate filings and subsidiary disclosures examined show a pattern in which a Dutch partnership channeled large profits to a Singaporean holding and those profits were not taxed in the jurisdictions where they were reported. Tax experts who reviewed the structures judged that the arrangement likely stems from transfers of intellectual property rights to overseas units and that it likely reduced Tesla’s U.S. tax liability by at least several hundred million dollars.
While the filings do not show clear legal violations, they highlight the continued tension between multinational tax planning strategies and public expectations about where profitable companies should pay taxes. They also illustrate the difficulties regulators face when corporate groups operate across a mosaic of disclosure regimes and tax rules.
Note on methodology - This article is based on a review of regulatory filings and subsidiary disclosures for Tesla and related units, interviews and expert assessments of the organizational structures and reported figures, and commentary from specialists in international tax matters.