Washington suggestions of closing tax loopholes has driven the exodus Washington – Arabstoday Companies are keeping more of their profits offshore, choosing overseas tax havens amid talk in Washington about closing corporate tax loopholes, The Wall Street Journal reported on Monday.
The business newspaper said its analysis of 60 big American companies had found that they had collectively parked a total of $166bn offshore last year.
That shielded more than 40 percent of their annual profits from US taxes, the report said.
Each of the 60 companies chosen for the analysis had held at least $5bn offshore in 2011, according to The Journal.
The list included Abbott Laboratories, whose store of untaxed overseas earnings rose by $8.1bn, to $40bn, the paper said. The increase exceeded the pharmaceutical maker's net income of $6bn.
Industrial conglomerate Honeywell International Inc boosted its store of untaxed earnings held by its offshore subsidiaries and earmarked for foreign investment by $3.5bn last year to $11.6bn, a rise equal to the company's annual profit, excluding a pension adjustment, The Journal said.
The practice is a result of US tax rules that allow companies to not pay taxes on profits earned by overseas subsidiaries if the money is not brought back to the United States, the report pointed out.