US corporations hold nearly $2.1 trillion worth of profit overseas during the last calendar year to avoid taxes at home, according to a report published by research firm Audit Analytics.
According to the report, all of this income claimed by a total of 547 US companies is free from the US corporate income tax rules that apply to profits held domestically.
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As per United States law, corporations do not have to pay income tax on most of their overseas profits until they are brought into the country. These earnings can be held offshore for years if they are classified as indefinitely invested abroad.
At US$110 billion, conglomerate General Electric had the biggest heap of earnings stored abroad.
General Electric was followed by software giant Microsoft with US$76.4 billion; drugmakers Pfizer with US$69 billion, and Merck & Co with US$57.1 billion; and Apple with $54.4 billion, the report added.
Meanwhile, the report has managed to capture the attention of the head of the US Senate’s Finance Committee.
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By GlobalData"The new numbers … certainly highlight what is one of the key challenges for tax reform," Senate Finance Committee Chairman Ron Wyden (D-Oregon) said on Tuesday on Capitol Hill, according to Reuters. "I do think there need to be some reforms in this area."
