U.S. Companies Are Stashing $2.1 Trillion Overseas to Avoid Taxes
Source: Bloomberg News
5:00 AM EST
March 4, 2015
Eight of the biggest U.S. technology companies added a combined $69 billion to their stockpiled offshore profits over the past year, even as some corporations in other industries felt pressure to bring cash back home.
Microsoft Corp., Apple Inc., Google Inc. and five other tech firms now account for more than a fifth of the $2.10 trillion in profits that U.S. companies are holding overseas, according to a Bloomberg News review of the securities filings of 304 corporations. The total amount held outside the U.S. by the companies was up 8 percent from the previous year, though 58 companies reported smaller stockpiles.
The money pileup, reflecting companies incentives to park profits in low-tax countries, has drawn the attention of President Barack Obama and U.S. lawmakers, who see a chance to tap the funds for spending programs and to revamp the tax code. That effort is stalled in Washington, and there are few signs that tech companies will bring the profits back to the U.S. until Congress gives them an incentive or a mandate.
Read more: http://www.bloomberg.com/news/articles/2015-03-04/u-s-companies-are-stashing-2-1-trillion-overseas-to-avoid-taxes
erronis
(15,216 posts)Plenty more personal wealth/income is deposited outside of the US. If you had earnings in the multimillion range you would be wise to pay several $100,000 with your lawyers/accountants to find ways to move this outside of a high-tax jurisdiction.
I don't quite understand how Ireland (as an example) would be a good tax haven since they have (I presume) pretty high tax rates on their own citizens.
Perhaps it's just a pea-in-a-shell game - just keep moving those liquid assets around so no one can see where they are. By the time the Feds get onto Credit Suisse or HSBC you've moved on to another friendlier spot.
melm00se
(4,988 posts)Wikipedia has a good description of how it works:
1. An advertiser pays for an ad in Germany.
2. The ad agency sends money to its subsidiary in Ireland, which holds the intellectual property (IP).
3. Tax payable in Ireland is 12.5 percent, but the Irish company pays a royalty to a Dutch subsidiary, for which it gets an Irish tax deduction.
4. The Dutch company pays the money to yet another subsidiary in Ireland, with no withholding tax on inter-EU transactions.
5. The last subsidiary, although it is in Ireland, pays no tax because it is controlled outside of Ireland, in Bermuda or another tax haven.
http://en.wikipedia.org/wiki/Double_Irish_arrangement
android fan
(214 posts)therefore, their stuff is FREE until they pay back all 2.1 trillion dollars in taxes
JDPriestly
(57,936 posts)It's the US military that protects their assets no matter where they are. We ordinary Americans cannot support our military with the taxes we pay. If they don't bring their money back to the US and pay their taxes, they may find themselves out there with no ability to protect their trade and internet routes, any banks or in general the world.
Belgium, Ireland, what ability do they have to protect world trade?
China might be able to develop a military that could do it, but . . . . is that what Apple, for example, wants.
YOHABLO
(7,358 posts)To protect our Freedom and Security?
blkmusclmachine
(16,149 posts)whereisjustice
(2,941 posts)working families.
Pauldg47
(640 posts)..better pricing to oust these scavenger blue chip corporations. Cost of living may go down.
davidpdx
(22,000 posts)Invest more in developing newer technology which would increase their profits even more.