There is a concern amongst tax authorities and the general public that multinational companies are able to shelter income in low-taxed jurisdictions. However, there is very little existing empirical evidence on how far they are able to do so, and what the impact is on their global tax liabilities. Using consolidated accounting data for a large number of companies between 2003 and 2007, this research investigates the extent to which tax haven activities are associated with lower tax liabilities of multinationals. The results suggest that, at the mean, the marginal effective tax rate (ETR) of a company with a tax haven subsidiary is one percentage point lower than for groups without such subsidiaries. The results also show that the marginal ETR of companies headquartered in countries with a territorial system is lower than that of similar companies headquartered in countries with a worldwide system of taxation. Corporate groups headquartered in the United States have the highest marginal ETR.