Keep up with the news by installing RT’s extension for . Never miss a story with this clean and simple app that delivers the latest headlines to you.

 

US firms parked $166 bln overseas last year

Published time: March 11, 2013 16:32
$1 coins (Reuters/Brendan McDermid)

$1 coins (Reuters/Brendan McDermid)

Sixty big US companies reportedly stashed $166 bln in offshore accounts in 2012. The analysis of the financial reports of major American firms revealed 40% of the companies’ annual profit was shielded from US taxes in 2012.

Each of the 60 firms chosen by the by the Wall Street Journal held at least $5 billion in overseas tax havens.
26 Technology and health-care companies made up the better part of the list and parked $120 billion in foreign units last year, which makes up nearly 75% of their income.

Among the companies examined 10 allocated more earnings offshore than they generated from their bottom line. Among the ten was drug maker Abbott Laboratories who's store of overseas earnings untaxed in the US rose by $8.1 billion to $40 billion. The increase exceeded the firm's net income of $6 billion, which was weighed down by a $1.4 billion charge related to early repayment of debt. Including that charge, Abbott reported a pretax loss on its US operations, the Journal reported.

Software maker Microsoft Corp. boosted the holdings of its foreign subsidiaries by $16 billion in the fiscal year to $60.8 billion, the third-largest holding in the Journal survey. The growth in Microsoft's overseas holdings nearly equaled its net income for the year at $17 billion.  Microsoft explained its foreign operations accounted for 93% of its pretax profit last year.

However some companies that accumulate big earnings outside the US, say it will be invested there in active business operations such as plants and research centers. 

Foreign earnings have become a concern for the US government and are part of contentious enforcement against US tax-dodgers. The US fiscal policy and tax code has also been under fire as the current system attracts criticism from businesses.