TV News LIES

Apple is not alone.  Dell, Microsoft and Fifteen Other Fortune-500 Corporations’ Financial Reports Indicate Their Offshore Profits Are In Tax Havens; Hundreds More Likely Do the Same

Recent Congressional hearings on the international tax-avoidance strategies pursued by the Apple corporation documented the company’s strategy of shifting U.S. profits to offshore tax havens. But Apple is hardly the only major corporation that appears to be engaging in offshore-tax sheltering: seventeen other Fortune 500 corporations disclose information, in their financial reports, that strongly suggests they have paid little or no tax on their offshore holdings. It’s likely that hundreds of other Fortune 500 companies are also engaging in similar strategies to take advantage of the rule allowing U.S. companies to “defer” paying U.S. taxes on their offshore income.

How We Know When Multinationals’ Offshore Cash is Largely in Tax Havens

Under current law, corporations can indefinitely defer paying U.S. income taxes on their offshore profits. Multinational corporations with offshore profits sometimes disclose, in their financial reports, the amount of tax they would pay if there were no “deferral” and their offshore profits were taxable in the United States.[1] But this potential tax rarely amounts to the full 35 percent U.S. corporate tax rate, since these companies typically have already paid some foreign income taxes on these foreign profits when they were earned. Companies are allowed a “foreign tax credit” against their U.S. tax when and if the profits are subject to U.S. tax. So a company that has already paid (for example) a 25 percent tax rate on its offshore income would only pay the difference between that amount and the U.S. corporate tax rate of 35 percent (in this example, 10 percent) when that income is repatriated to the U.S.

More...