A group of major US technology and pharmaceutical companies have reduced their average tax rate by a quarter since 2006 as they deposited more cash offshore than all other US companies combined, according to the
The business daily reports that nearly US$500bn of offshore cash is held by a small group of 14 US tech and pharma groups. The
research finds that they paid an average overseas tax rate of just 10% in 2013. Over the past eight years, overall tax rates fell as their lightly-taxed foreign profits grew at nearly three times the pace of their foreign sales.
The paper reviewed the accounts of Apple, Microsoft, Google, Pfizer, Cisco Systems, Oracle, Qualcomm, Johnson & Johnson, Merck, Amgen EMC, eBay, Eli Lilly and Medtronic, which provided data on their offshore cash. Collectively they held US$479bn of offshore cash and equivalents at the end of their last financial year, or just over half of the US$947bn that credit ratings agency (CRA) Moody’s estimated was held by US non-financial companies. With Pfizer the one exception, all reported falls in their tax rates, which ranged from 10% to 66%.
American companies have lobbied for a temporary ‘tax holiday’ to encourage them to repatriate their profits to the US. However, earlier this week the US Joint Committee of Taxation, which provides Congress with non-partisan analysis, reported that any such move would cost the government US$96bn in lost revenue over a decade. It also warned of a potential “moral hazard” by signalling that tax holidays would become a regular part of the tax system.
A report by broking group Marsh examines the repercussions from the administration of the South Korean company, which filed for bankruptcy protection at the end of August.
Global research by C2FO suggests that smaller businesses are less concerned with the repercussions of Brexit and the upcoming US presidential election.
A squeeze on skilled talent means it now takes an average of seven weeks to fill open permanent roles in finance in the UK according to new research from financial services recruitment firm Robert Half.
Early-stage merger and acquisition deals in Asia-Pacific show nearly 10% year-on-year growth in recent months.