It’s not just Apple: Cisco, Google, HP among the country’s biggest overseas cash hoardersTop Silicon Valley firms like Apple, Google and Cisco are among the worst offenders when it comes to keeping money away from the IRS with offshore accounts, a new report shows.
Those firms, along with Microsoft, IBM and Hewlett-Packard, were in the top 15 of the 100 publicly traded companies who are using legal loopholes to shift profits offshore, according to a report from U.S. PIRG, a contingent of public interest research groups. Together, they held $776 billion off shore through a combined 859 tax haven subsidiaries, the report said. It was first cited by Forbes.
According the report, many US tech firms hid their profits by booking them to offshore subsidiaries registered in tax havens — countries which charge few, or no, taxes. Many of these subsidiaries have no employees at all, and conduct no real business operations other than serving as a place to put profits, the report said.
Apple has probably received the most attention for the offshoring profits. CEO Tim Cook was called before congress to discuss the practice in May, where he defended it by saying that the reason it keeps profits overseas is that they were earned overseas due to rapid growth in its international business. Apple pays about $6 billion in taxes every year and has an effective 30.5 percent tax rate, Cook noted at the time.
Cisco’s John Chambers, for his part, has made it no secret his distaste for U.S. taxes and the U.S. business environment, saying he wasn’t interested in doing deals in the U.S. because he’d lose too much to taxes. In January, he ranked Russia and Canada ahead of the U.S. in terms of business friendliness.
The Top 15 companies for 2012 were: General Electric, Apple, Pfizer, Microsoft, Merck, Johnson & Johnson, IBM, Exxon Mobil, Citigroup, Cisco Systems, Abbott Laboratories, Procter & Gable, Hewlett-Packard, Google and PepsiCo.