GAO: Tax haven firms have edge

A federal watchdog agency has concluded that companies incorporated in overseas tax havens likely have an edge over domestic competitors in pursuing federal contracts.

The report, "International Taxation: Tax Haven Companies Were More Likely to Have a Tax Cost Advantage in Federal Contracting," released last month by the Government Accountability Office, examined the tax status of large "tax haven contractors" and compared them to large domestic contractors in 2000 and 2001.

"In both years, tax haven contractors were about one and a half times more likely to have no tax liability as domestic contractors," GAO said.