79:. In 2012 Northwestern University law professor Thomas Brennan asserted that "companies are holding money outside the U.S. in part because they are waiting for Congress to repeat a 2004 tax holiday law that set a maximum tax rate for repatriation profits of 5.25%. 'Why not do it?' he said. 'It’s pure upside. In the worst-case scenario, you’re going to be taxed as you would have been in any event.'" The 2004 tax holiday, under President George W. Bush, yielded a lot of repatriation but not much economic benefit, according to one view. A number of the large U.S.-based companies that would benefit, including Google, Cisco Systems Inc., Qualcomm Inc. and Oracle Corp., were lobbying during 2011-2012 to obtain a repatriation holiday. At the time, however, President Obama was believed to oppose a one-time tax holiday, as it would be a giveaway to big corporations.
64:
billion in the preceding year, shielding 40% of their earnings. In 2012, a
Bloomberg study found $ 1 trillion held overseas for 70 U.S.-based multi-national companies, using public annual reports for years ending in 2010 and 2011, and it estimated an overall total of $ 1.6 trillion. In 2013, a private research firm study asserted there were more than $ 2.1 trillion of U.S. corporate profits untaxed in 2013. In 2016, the Institute on Taxation and Economic Policy, estimates $ 2.6 trillion held offshore and two-thirds of that is held by 30 U.S. companies, with Apple, Pfizer, and Microsoft being the top three (see chart).
112:(OECD) countries vary from a low of 8.5% in Switzerland to a high of 35% in the United States, with an average of 22%. In addition to the federal tax rates, provincial, state and local taxes may also apply in most jurisdictions. For example, the 2015 provincial corporate tax rates in Canada range from 11.5% to 16% in addition to the federal tax rate of 15%, unless taxable profits of small corporations are low enough to qualify for a lower tax rate.
63:
A number of studies have estimated the untaxed overseas profits to be from US$ 1.6 to $ 2.1 trillion. A 2011 study by JPMorgan Chase & Co. identified $ 1.375 trillion in undistributed foreign earnings. A Wall Street
Journal analysis in 2012 found that the amounts for 60 large firms grew by $ 166
50:
The downside of a strategy of retaining profits offshore is that corporations may want or need to pay dividends to shareholders, or to make investments in the United States, besides other reasons. The alternative may be to borrow funds in the U.S., or access the funds retained offshore in the form of
54:
The Tax Cuts and Jobs Act of 2017 (TCJA) imposed a one time tax on these offshore profits at 8% (non-cash) and 15.5% (cash) respectively. The Act also includes a provision that taxes all foreign profits in the US in the year they are earned ending the ability of US companies to defer paying US tax
434:
their intention to merge for an approximate sum of $ 160 billion making this the largest pharmaceutical deal ever, and the third largest merger in history. The terms of the merger propose that the merged company will maintain
Allergan's Irish domicile, resulting in the new company being subject to
82:
President Obama's
February 2015 budget proposal called for a 14% tax to be applied on untaxed overseas profits, indicating that the proposal would yield $ 238 billion, implying a $ 1.7 trillion estimate of untaxed profits. It was proposed as a one-time tax to be imposed whether or not funds are
119:
paid to shareholders. For example, the overall U.S. tax on corporate profits of 35% is less than or similar to that of
European countries such as Germany, Ireland, Switzerland and the United Kingdom, which have lower corporate tax rates but higher taxes on dividends paid to shareholders.
23:. The profits of United States corporations are subject to a federal corporate tax rate of 21%. In principle, the tax is payable on all profits of corporations, whether earned domestically or abroad. However, overseas subsidiaries of U.S. corporations are entitled to a
823:
778:
35:. Many corporations have accumulated substantial untaxed profits offshore, especially in countries with low corporate tax rates. In recent years it has been estimated that untaxed profits range from US$ 1.6 to $ 2.1 trillion.
27:
of profits on active income until repatriated to the U.S., and are regarded as untaxed. When repatriated, the corporations are entitled to a foreign tax credit for taxes (if any) paid in foreign countries.
782:
760:
840:
39:
noted that the "ntaxed foreign earnings are part of a contentious debate over U.S. fiscal policy and tax code." The profits earned abroad and retained there are subject to a
580:
86:
In 2015, the topic of U.S. taxation of companies' operations abroad was addressed by several potential U.S. presidential candidates. For example, Republican senators
109:
881:
584:
94:
have called for elimination of U.S. taxes on companies' operations abroad, within a broader proposal for corporate and individual tax rate changes.
871:
746:
876:
503:
844:
671:
19:
deals with those U.S. companies whose offshore subsidiaries earn profits which are retained in foreign countries to defer paying
721:
Directorate, Government of Canada, Canada
Revenue Agency, Taxpayer Services and Debt Management Branch, Taxpayer Services.
689:
20:
625:
886:
103:
610:
551:
529:
891:
508:
76:
556:
135:
Large U.S. multinational companies which are known to have significant untaxed profits include:
722:
40:
480:
463:
8:
452:
127:
jurisdictions which offer no or very low corporate taxes, as well as other tax benefits.
740:
633:
412:
824:"Apple, Capitalizing on New Tax Law, Plans to Bring Billions in Cash Back to U.S."
707:
781:. United States Senate Subcommittee on Investigations. p. 6. Archived from
115:
In comparing national corporate tax rates one should also take into account the
486:
44:
865:
804:
637:
498:
438:
116:
32:
24:
672:"Obama will propose mandatory tax on US companies' earnings held overseas"
108:
Corporate tax rates vary between tax jurisdictions. The national rates of
474:
87:
611:"Untaxed U.S. corporate profits held overseas top $ 2.1 trillion: study"
530:"Obama targets foreign profits with tax proposal, Republicans skeptical"
431:
75:
It has been suggested that companies hold profits overseas hoping for a
608:
458:
444:
469:
427:, $ 69 billion (2013). On 23 November 2015, Pfizer and Irish company
418:
124:
428:
91:
693:
690:"Senators Rubio, Lee push U.S. tax plan to cut corporate rates"
585:"Cash Hoard Grows by $ 187 Billion in Untaxed Overseas Profits"
424:
549:
527:
123:
Many large multinational companies retain untaxed profits in
779:"PSI Memo on Offshore Profit Shifting and the U.S. Tax Code"
805:"Pfizer seals $ 160bn Allergan deal to create drugs giant"
83:
repatriated. The proposal has not been heard about since.
609:
Kevin
Drawbaugh and Patrick Temple-West (April 8, 2014).
130:
841:"Medtronic-Covidien Merger Approved by Irish High Court"
626:"A Tax Cut That Lifts the Economy? Opinions Are Split"
110:
Organisation for
Economic Co-operation and Development
104:
Corporate tax § International corporate tax rates
31:
Retaining such profits offshore may be regarded as a
822:WAKABAYASHI, DAISUKE; CHEN, BRIAN X. (2018-01-17).
528:Jeff Mason and Kevin Drawbaugh (February 1, 2015).
17:
Companies of the United States with untaxed profits
552:"More U.S. Profits Parked Abroad, Saving on Taxes"
550:Scott Thurm and Kate Linebaugh (March 10, 2013).
70:
863:
545:
543:
541:
539:
821:
604:
602:
600:
598:
596:
594:
575:
573:
571:
569:
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67:Foreign profits were up 93% from 2008 to 2013.
665:
663:
661:
659:
657:
655:
653:
579:
536:
521:
745:: CS1 maint: multiple names: authors list (
591:
564:
504:Microsoft Corp. v. Internal Revenue Service
435:corporation tax at the Irish rate of 12.5%.
415:, $ 110 billion profits abroad (as of 2013)
669:
650:
882:Corporate governance in the United States
145:That are Greater Than $ 5 Billion, 2012
97:
872:Corporate taxation in the United States
720:
708:"Table II.1. Corporate income tax rate"
864:
131:List of companies with untaxed profits
776:
770:
623:
682:
13:
877:Tax avoidance in the United States
14:
903:
777:Levin, Carl (20 September 2012).
483:, had $ 14.8 billion (as of 2012)
833:
815:
797:
753:
670:Paul Lewis (February 1, 2015).
477:, had $ 40 billion (as of 2011)
143:Deferred Foreign Cash Balances
714:
700:
624:Cohen, Patricia (2017-11-02).
617:
137:
71:Politics and tax policy issues
1:
514:
141:United States Companies with
58:
7:
492:
55:on unrepatriated earnings.
10:
908:
461:
450:
101:
140:
509:Repatriation tax holiday
887:Corporate tax avoidance
761:"www.oecd-ilibrary.org"
723:"Corporation tax rates"
557:The Wall Street Journal
441:, $ 57.1 billion (2013)
421:, $ 76.4 billion (2013)
37:The Wall Street Journal
447:, $ 252 billion (2018)
481:Johnson & Johnson
256:Johnson & Johnson
98:Comparative tax rates
51:inter-company loans.
41:foreign exchange risk
811:. November 23, 2015.
785:on 24 September 2012
464:Google tax avoidance
453:Apple tax practices
167: % total cash
827:The New York Times
630:The New York Times
117:taxes on dividends
21:U.S. corporate tax
727:www.cra-arc.gc.ca
583:(March 2, 2012).
409:
408:
899:
892:Offshore finance
856:
855:
853:
852:
843:. Archived from
837:
831:
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819:
813:
812:
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795:
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767:
765:
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736:
734:
733:
718:
712:
711:
704:
698:
697:
696:. March 4, 2015.
686:
680:
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667:
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645:
644:
621:
615:
614:
606:
589:
588:
577:
562:
561:
547:
534:
533:
525:
413:General Electric
200:General Electric
138:
43:, besides other
907:
906:
902:
901:
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896:
862:
861:
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848:
839:
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834:
820:
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802:
798:
788:
786:
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771:
763:
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758:
754:
738:
737:
731:
729:
719:
715:
706:
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701:
688:
687:
683:
668:
651:
642:
640:
622:
618:
607:
592:
578:
565:
548:
537:
526:
522:
517:
495:
466:
455:
368:Hewlett-Packard
166:
161:
156:
151:
144:
142:
133:
106:
100:
73:
61:
45:financial risks
12:
11:
5:
905:
895:
894:
889:
884:
879:
874:
858:
857:
832:
814:
796:
769:
752:
713:
699:
681:
649:
616:
590:
563:
535:
519:
518:
516:
513:
512:
511:
506:
501:
494:
491:
490:
489:
484:
478:
472:
467:
449:
448:
442:
439:Merck & Co
436:
422:
416:
407:
406:
403:
400:
397:
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392:
389:
386:
383:
379:
378:
375:
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365:
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132:
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99:
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72:
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60:
57:
9:
6:
4:
3:
2:
904:
893:
890:
888:
885:
883:
880:
878:
875:
873:
870:
869:
867:
847:on 2016-03-06
846:
842:
836:
828:
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784:
780:
773:
762:
756:
748:
742:
728:
724:
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709:
703:
695:
691:
685:
677:
673:
666:
664:
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639:
635:
631:
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605:
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582:
581:Richard Rubin
576:
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568:
559:
558:
553:
546:
544:
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540:
531:
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520:
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499:Tax inversion
497:
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460:
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194:
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188:
185:
184:
180:
177:
174:
171:
170:
165:Foreign cash
164:
159:
154:
152:($ billions)
149:
148:
139:
136:
128:
126:
121:
118:
113:
111:
105:
95:
93:
89:
84:
80:
78:
68:
65:
56:
52:
48:
46:
42:
38:
34:
29:
26:
22:
18:
849:. Retrieved
845:the original
835:
826:
817:
808:
799:
789:22 September
787:. Retrieved
783:the original
772:
755:
730:. Retrieved
726:
716:
702:
684:
676:The Guardian
675:
641:. Retrieved
629:
619:
587:. Bloomberg.
555:
523:
134:
122:
114:
107:
85:
81:
74:
66:
62:
53:
49:
36:
33:tax strategy
30:
25:tax deferral
16:
15:
475:Abbott Labs
88:Marco Rubio
77:tax holiday
866:Categories
851:2015-09-01
732:2016-02-07
643:2017-11-03
532:. Reuters.
515:References
462:See also:
451:See also:
349:>47.2%
102:See also:
638:0362-4331
487:Honeywell
470:Medtronic
432:announced
419:Microsoft
354:Medtronic
312:Coca-Cola
186:Microsoft
125:tax haven
59:Magnitude
809:BBC News
741:cite web
493:See also
429:Allergan
396:Wal-Mart
321:>88%
318:>13.9
298:Qualcomm
209:>50%
206:>41.9
160:Foreign
150:Company
92:Mike Lee
694:Reuters
346:>9.2
636:
459:Google
425:Pfizer
377:~100%
270:Pfizer
242:Oracle
228:Google
155:Total
764:(PDF)
445:Apple
340:Merck
335:~85%
332:~11.8
284:Amgen
279:~80%
276:~19.2
265:100%
214:Cisco
175:110.2
172:Apple
791:2012
747:link
634:ISSN
405:85%
391:88%
382:eBay
374:~8.1
363:93%
343:19.5
329:13.9
326:Dell
315:15.8
307:62%
304:16.5
301:26.6
293:82%
290:16.6
287:19.4
273:24.0
262:24.5
259:24.5
251:84%
248:25.1
245:29.7
237:48%
234:25.7
231:49.3
223:89%
220:41.7
217:46.7
203:83.7
195:89%
192:50.0
189:59.5
181:67%
178:74.0
162:Cash
157:Cash
90:and
402:5.6
399:6.6
388:7.0
385:8.0
371:8.1
360:8.3
357:8.9
868::
807:.
743:}}
739:{{
725:.
692:.
674:.
652:^
632:.
628:.
593:^
566:^
554:.
538:^
47:.
854:.
829:.
793:.
766:.
749:)
735:.
710:.
678:.
646:.
613:.
560:.
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