Cash Booked Offshore for Tax Purposes by U.S. Multinationals Doubled between 2008 and 2013,
10/6/15, "US companies hold $2.1 trillion offshore," CNBC, John W. Schoen
"There's enough cash sitting in offshore bank accounts to wipe out the federal deficit — if only it was subject to U.S. taxes.
That's because U.S. companies are saving some $620 billion by parking profits outside the country, according to the latest accounting from Citizens for Tax Justice and U.S. PIRG Education Fund.
least 358 large U.S. companies collectively maintain 7,622 separate
overseas subsidiaries holding $2.1 trillion in profits, the group said
in a report Tuesday. (The estimated tax bill comes from corporate
Bermuda and the Cayman Islands are the most
popular tax haven jurisdictions; about 60 percent of companies with tax
subsidiaries have at least one in those two island nations, according to
the report. The Netherlands leads the list in terms of the total number
Much of the untaxed offshore profit — roughly
$1.4 trillion — is held by a relatively few companies; just 30
corporations held two-thirds of the cash logged by the study.
overall amount of potential tax could be larger. The group said that
only 57 companies disclose the amount they would owe if they didn't
report profits offshore.
Apple (AAPL) topped the list, with $181 billion in offshore profits, a
cash pile that would generate nearly $60 billion for the Treasury if
subject to U.S. taxes.
[General Electric is second with $119 billion in offshore profits, Microsoft is third with $108 billion.]
Pfizer (PFE), the world's largest
drugmaker, operates 151 tax subsidiaries that hold $74 billion in
offshore profits, the fourth highest among the Fortune 500, according to
The report follows a series of recommendations by the
Organization for Economic Co-operation and Development, a policy group,
to overhaul global tax laws and treaties to better capture untaxed
The proposals are aimed at tax strategies
that shift money among subsidiaries around the world to avoid paying tax
to a company's home country. Those strategies include shifting assets
to countries with low tax rates or booking sales in a tax haven that
didn't actually happen there.
"All too often, corporations'
offshore cash isn't offshore at all — it's right here in the United
States," said Robert McIntyre, director of Citizens for Tax Justice.
Reuters investigation in 2013 found that 74 percent of the 50 biggest
U.S. technology groups used such tactics to cut their tax bills.
widespread calls for U.S. tax reform — including a White House proposal
this year for a "tax holiday" for companies that bring cash back home —
the overhaul remains mired in the complex web of special interests that
such an overhaul would require.
A similar effort on a global
scale would be even more complex. While some of the OECD's
recommendations could be implemented by individual governments with
changes to their tax laws, others would require new tax treaties between