The oil and gas industry has long been known for widespread tax avoidance. Now, thanks to new disclosure rules, we have a better picture of how this occurs.
The Financial Accounting Standards Board (FASB) now requires companies to publicly break down their tax payments by jurisdiction. (“Jurisdiction” in this context typically refers to a country, though it can also apply to territories with independent tax systems, including tax havens). This year companies have started disclosing this information in their Annual Reports submitted to the SEC.
These new disclosures highlight how the U.S. tax code encourages corporate tax avoidance through incentives and credits and allows the oil and gas industry to engage in onshore, rather than offshore, tax avoidance. Substantial tax giveaways reduce federal funds, putting further strain on the national budget.
Industry giants such as Exxon and Chevron pay more in taxes abroad than they pay in the U.S, as detailed in a 2025 report by the FACT Coalition. The report details 11 disclosures from big oil giants to showcase tax giveaways for the industry.
Corporate taxes are based on income, not on production. Companies can report profits in low-tax countries while underreporting in the U.S., then use foreign tax credits to further reduce their domestic tax bill.
These foreign tax advantages stack on top of already generous domestic breaks.
Despite claims from the Trump administration, federal gas tax suspensions and oil subsidies do not lower energy bills or gas prices. In 2025 alone, American corporations across industries used tax havens to avoid over $11 billion in taxes.
The new FASB reporting requirements are particularly relevant now, as the gas and oil industry’s tax avoidance continues while Americans face rising costs at the pump. Tax subsidies and loopholes ultimately allow big oil to avoid paying its fair share while offering no benefit to consumers. These advantages do not lower gas prices and contribute to broader issues. Tax breaks for the oil and gas industry cannot be ignored as the global conflict over energy resources intensifies.
