If you’re of a certain age, you remember the oil company Halliburton not just as the pioneer of “fracking” technology but also as the company Dick Cheney ran immediately before he became George W. Bush’s Vice President in 2001. Halliburton left a trail of tax-avoidance controversy behind it in the first decade of the 21st century, although the trail ran cold after its leaders gradually stopped disclosing information about its offshore holdings. But the company’s latest annual report, released last month, throws the doors wide open once again on Halliburton’s penchant for offshoring its profits to tax havens. The reason? Terrific new disclosure rules introduced by an obscure but vital agency, the Financial Accounting Standards Board (FASB).
It’s long been suspected that Halliburton was using post-office-box subsidiaries in foreign tax havens to artificially shift its profits out of the U.S. and into low-rate jurisdictions. A 2004 report from the General Accounting Office (GAO) focusing broadly on federal contractors’ use of offshore subsidiaries found that Halliburton had at least 13 subsidiaries in the Cayman Islands, and 131 foreign subsidiaries overall. But when, a decade later, ITEP tallied the tax-haven subsidiary disclosures of Fortune 500 corporations in our 2017 “Offshore Shell Games” report, we found Halliburton was only disclosing three Cayman subsidiaries. And by 2024, every trace of a Cayman Islands presence had been completely wiped from the company’s annual financial report.
But just a year later, the company acknowledges that the Caymans play a pretty prominent role in its tax planning. The income tax section of Halliburton’s 2025 annual report discloses that Halliburton slashed its income tax expense by $29 million last year by having some of its income taxed at the Cayman Islands’ 0 percent tax rate instead of the 21 percent rate imposed by the U.S. corporate income tax. This means that the company booked $138 million of income in the Caymans last year.
This is a pretty big disclosure to make. Even if $138 million is “only” 14 percent of Halliburton’s 2025 foreign income, anyone who’s ever visited the virtually industry-free Caymans will recognize immediately that any such profits were likely generated by nothing more substantial than a pile of paper in a post office box.
So why are the company’s leaders coming clean? Because FASB, the agency that has been deputized by the Securities and Exchange Commission to set the standards for what publicly held companies must disclose annually to investors, told them to.
FASB’s revised income tax disclosure rules, promulgated in 2023 and fully effective for fiscal years ending in December of 2025, require companies to, for the first time, disclose the effects specific countries have on their effective tax rates when those effects exceed a certain threshold of significance. (Halliburton is not the only company that’s been forced into disclosures of this kind so far: the soft-drink giant Pepsico recently disclosed cutting its taxes by $310 million last year using a Bermuda subsidiary.)
But old habits die hard: Halliburton still doesn’t say a word about the existence of the invisible Cayman Islands subsidiaries that must be housing this $138 million income stream. The company’s year-end list of subsidiaries still includes precisely zero in the Caymans, presumably because FASB hasn’t changed its requirements for disclosing the existence of such subsidiaries.
FASB exists to ensure that investors have the information they need to accurately judge where they should put their capital, and the agency’s new income tax disclosure rules are already advancing that goal just two weeks into their implementation. One can only hope that investors attending the company’s next earnings call will use these disclosures to ask basic questions about how Halliburton “earned” $138 million in a country not known for oil production. (Such questions were emphatically not asked by the clubby group of Wall Street analysts invited to the earnings call that accompanied the release of Halliburton’s new annual report.) As the current trickle of corporate annual financial reports becomes a flood in the next month, we’ll get a much better sense of what companies like Halliburton have been (for the most part successfully) trying to hide over the past two decades.
