US companies retaining more money offshore: report
AFPWASHINGTON--U.S. companies are keeping more of their profits offshore, choosing overseas tax havens amid talk in Washington about closing corporate tax loopholes, The Wall Street Journal reported Monday.
March 12, 2013, 12:19 am TWN
The business newspaper said its analysis of 60 big American companies had found that they had collectively parked a total of US$166 billion offshore last year.
That shielded more than 40 percent of their annual profits from U.S. taxes, the report said.
Each of the 60 companies chosen for the analysis had held at least US$5 billion offshore in 2011, according to The Journal.
The list included Abbott Laboratories, whose store of untaxed overseas earnings rose by US$8.1 billion, to US$40 billion, the paper said. The increase exceeded the pharmaceutical maker's net income of US$6 billion.
Industrial conglomerate Honeywell International Inc. boosted its store of untaxed earnings held by its offshore subsidiaries and earmarked for foreign investment by US$3.5 billion last year to US$11.6 billion, a rise equal to the company's annual profit, excluding a pension adjustment, The Journal said.
The practice is a result of U.S. tax rules that allow companies to not pay taxes on profits earned by overseas subsidiaries if the money is not brought back to the United States, the report pointed out.