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How SAP Trims Its U.S. Tax Bill

German Finance Minister Wolfgang Schaeuble (L) talks to his U.S. counterpart Timothy Geithner in Westerland on the German island of Sylt in this July 30, 2012 file photo.

How SAP Trims Its U.S. Tax Bill

In July 2012, then-U.S. Treasury Secretary Tim Geithner traveled to an island off the German coast to meet Wolfgang Schaeuble, Germany's finance minister. Schaeuble was on vacation, but Geithner visited to discuss the euro zone crisis. Talk also turned to a long-running bugbear of Schaeuble's: corporate tax avoidance.

According to a letter Schaeuble later wrote to Geithner, the Treasury Secretary had explained in their conversation that the most aggressive forms of avoidance often involved technology companies parking valuable know-how in low-tax countries and making other parts of the company pay high rates to use it.

Reporting by Tom Bergin, REUTERS.