“The overseas earnings stockpile has climbed by 70 percent over the past five years, said research firm Audit Analytics. Data in its report covers the Russell 3000 index of the largest U.S. corporations.,” Aubin reports. “U.S.-based multinationals do not have to pay U.S. corporate income tax on foreign earnings as long as the earnings do not enter the United States. Accounting rules also let the companies avoid recognizing a tax expense if management intends to keep the earnings indefinitely reinvested overseas… Conglomerate General Electric Co., had the most indefinitely reinvested overseas earnings, at about $108 billion, while drugmaker Pfizer Inc (PFE.N) was next with $73 billion, according to Audit Analytics.”
“Businesses have been lobbying Congress for a new law that would let them bring foreign profits home on a regular basis with little or no tax due, or for a one-time “tax holiday” on foreign earnings,” Aubin reports. “Some companies have been borrowing money in the U.S. bond market rather bring their overseas earnings home. Computer giant Apple Inc. last week raised $17 billion in a record U.S. bond sale to help fund its plan to return money to its shareholders. The bond sale let Apple avoid taxes that would have been due if it had used some of its $102 billion in foreign cash instead.”
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Tagged: Apple, Apple bonds, Apple buybacks, Apple debt, Apple dividend, iBonds, tax holiday, tax repatriation, U.S. corporate taxes, U.S. taxes
