A recent study conducted by the Citizens for Tax Justice and the U.S. PIRG Education Fund has highlighted just the extent of the practice, revealing that US$2.1 trillion in profits is being held by UIS companies in offshore accounts, with the top ten US tech companies alone currently hoarding around US$549.7 billion.
“All too often, corporations’ offshore cash isn’t offshore at all—it’s right here in the United States,” says Robert McIntyre, director of Citizens for Tax Justice. “Corporations are using skilled tax attorneys to make it appear on paper that their U.S. profits, and their U.S.-based cash, are being earned, and kept, in foreign tax havens. The tax code makes this scam possible.”
The study highlights Apple particularly as the most egregious offender of all US companies, currently stashing US$181 billion overseas. According to the authors of the survey, Apple “would owe $59.2 billion in U.S. taxes if these profits were not officially held offshore for tax purposes”.
The next worst offender of the tech variety is Microsoft (stockpiling US$108.3 billion) followed by IBM, with a paltry US$61.4 billion.
Also making the list is Cisco, Google, Oracle, Qualcom as well as Intel and EMC2.
The study found that most of America’s largest corporations use offshore tax havens, with at least 358 companies, nearly 72% of the Fortune 500, operating subsidiaries in tax haven jurisdictions as of the end of 2014.
The report also noted that the earnings of these subsidiaries is not just implausible, it’s impossible. American multinationals collectively claim earned profits in Bermuda and the Cayman Islands equal to 1,643% and 1,600% respectively of each country’s entire GDP or yearly economic output.