Large US Companies Hold $2 Trillion Offshore

May 22, 2014 Taxation in USA

WASHINGTON D.C. – Large US companies are holding an exorbitant amount of funds offshore, and these businesses are intentionally taking steps to obscure the extent of their holdings.

In a new report published earlier this week the non-government organization Citizens for Tax Justice showed that a significant number of Fortune 500 companies in the USA are holding well over USD 2 trillion of funds offshore, and if the entirety of the funds was repatriated back into the USA, the companies would be required to pay a cumulative tax bill of approximately USD 550 billion.

In the newly published report the experts of Citizens for Tax Justice claimed that under current regulations US business are required to disclose how much funds they hold offshore, and what the tax obligation on those funds would be if they were repatriated back to the USA, however, in reality most large businesses routinely opt to use a selection of loopholes which allow them to keep the information secret.

According to the findings detailed in the report, among all the Fortune 500 companies filing tax returns in 2013 only 243 disclosed the total amount of their overseas holdings, and only 28 of those chose to fully comply with their obligations to show the effective tax rate they would face if repatriating the funds back to the USA.

Citizens for Tax Justice suggested that the choice by large companies to willingly hide the effective tax rate for repatriation is intended to obscure the real effective tax rate that businesses pay on the profits that they earn in the USA but shift offshore.

Photo by: Ervins Strauhmanis