Yum! Brands, the fast-food multinational that owns KFC, Taco Bell, and Pizza Hut, reported this week that it made $1 billion of pretax profits in the U.S. last year—and didn’t pay a dime of federal income taxes on those profits.
The big corporate tax cuts enacted by Congress at the behest of President Trump last year were vital in Yum’s federal tax goose egg, but the company also created a new tax dodge that will sharply reduce its tax bill in years to come: moving the intellectual property of Pizza Hut out of the U.S. and into Malta, a European tax haven.
Buried deep in the footnotes of Yum’s annual financial report is an acknowledgement that “certain Pizza Hut IP rights were transferred from the U.S. to Malta” in 2025, a move the company says gave Yum a “net tax benefit of $89 million.” Yum’s narrative describes this move as “simplifying the organizational footprint” rather than the transparent grift it appears to be.
As the Tax Justice Network explains in a helpful new analysis, Malta is widely acknowledged to be one of the most prominent tax havens in the world, allowing multinational corporations to enjoy tax rates as low as 5 percent. This isn’t new territory for Yum: just four years ago the company moved much of the intellectual property of KFC out of the U.S. and into Switzerland, disclosing a $187 tax benefit from this move. What could be more Swiss than Kentucky Fried Chicken?
None of this is to say that Yum is a stranger to other tax avoidance strategies. The single biggest factor explaining Yum’s 0 percent tax rate last year is the research and development expensing provision, created by last year’s Trump tax cuts. This one new tax break saved the company $86 million in federal taxes last year; since Yum’s past R&D efforts have yielded such treasures as the Seven Layer Burrito and the KenTacoHut, one can only imagine what the American taxpayer will get for their $86 million this time.
Yum also reduced its taxes by $34 million using the Foreign-Derived Deduction-Eligible Income (FDDEI) provision, yet another obscure-but-deadly tax acronym bestowed on us by Congress and the Trump administration last year. And the company reduced its federal income taxes by $23 million by paying its executives in stock options.
If moving Kentucky Fried Chicken to Switzerland sounds ridiculous, moving KFC’s headquarters to Texas is only somewhat less so. Yet that’s exactly the plan Yum announced last year, moving the headquarters of its KFC subsidiary from its long-time Kentucky home to Plano, Texas in a move that appears nakedly designed to take advantage of Texas’ status as a state income tax haven.
The irony of Yum’s willingness to ship its intangible assets pretty much anywhere for tax purposes is that the company has benefited from a Trump administration tax break that was ostensibly supposed to encourage companies to bring their intellectual property back to the U.S.—and keep it here.
When Congress enacted the FDDEI (then just called FDII) tax break in 2017, it explained that the whole rationale for this new corporate giveaway was that it “reduces or eliminates the tax incentive to locate or move intangible income abroad.” Yum was among hundreds of U.S. multinationals that had aggressively shifted income offshore prior to the 2017 tax cut: a 2017 ITEP report identified 60 subsidiaries the Yum corporation had located in foreign tax havens, with a total of $2 billion of Yum’s cumulative profits stored offshore.
So it was companies like Yum that Congressional defenders of the FDDEI provision had in mind when they predicted a wave of IP onshoring after 2017. Yet Yum has now done exactly the opposite of what Congress promised, taking steps twice in the last five years to shift transparently American assets into foreign tax havens. If Kentucky Fried Chicken can be shipped to a foreign tax haven, what’s next—offshoring the production of Americans flags?
In the runup to the 2025 tax cuts, ITEP argued that the FDDEI provision had succeeded only in enriching the largest tech companies and should be repealed. Instead, Republicans in Congress chose to make this tax giveaway even more generous, making changes estimated to cost $134 billion over the next decade. The obvious question for those who were puzzled by this choice was: what are American taxpayers getting for their $134 billion? If nothing else, Yum’s habit of offshoring its intellectual property provides an answer to this question: Swiss Fried Chicken.
