American tech companies added $69 billion to their overseas stashes in the past year, with Apple, Google and Microsoft leading the way, Bloomberg News reports.
Apple, which added $15 billion to its stash in 2014, now holds about $70 billion in profits outside the United States. Microsoft has $93 billion, topped only by General Electric, which has $119 billion parked overseas. Altogether, American companies are holding $2.10 trillion in profits overseas to avoid paying taxes in the United States.
Bloomberg notes that the United States requires companies to pay a 35 percent corporate tax on profit they earn around the world. But some reports have said that tech companies pay considerably less than that as they park that profit elsewhere, and use other tactics such as opening foreign subsidiaries.
For example, Cisco CEO John Chambers told Bloomberg TV a few weeks ago that the San Jose company is investing in India, Israel and France. I d prefer to have the vast majority of my employees here, he said. And our tax policy is causing me to make decisions that I don t think is in the interest of our country, or even in our shareholders, long term.
Why do tech companies, which have long pushed for a change in U.S. tax laws, have an advantage when it comes to keeping money overseas? From Bloomberg:
Corporations that rely on intellectual property — trademarks, logos or patents — have an advantage over heavy industrial companies and the financial industry, which relies on providing services to customers, said Jennifer Blouin, an associate professor of accounting at the University of Pennsylvania s Wharton School.
Here s how much selected Silicon Valley tech firms added to their overseas stashes in the past year, according to Bloomberg:
- Google: $9 billion
- Gilead Sciences: $7 billion
- Oracle: $6 billion
- Micron Technology: $5 billion
- Cisco: $5 billion
- Hewlett-Packard: $5 billion
Here are the top 10 tech companies in terms of profit parked overseas:
Photo: People walk past an Apple store in Hefei, east China s Anhui province, on Sept. 10, 2014. (AFP/Getty Images)