More tax day data porn: These are the 10 companies that have the most untaxed foreign income:

1. General Electric (GE)
Untaxed foreign profit: $94 billion
Tax Haven: US
Strategy: An army of 1000 former IRS accountants keeps GE’s taxes near zero

2. Pfizer (PFE)
Untaxed foreign profit: $48.2 billion
Tax Havens: Global
Strategy: HC Industry keeps more profits overseas than any other industry

3. Merck (MRK)
Untaxed foreign profit: $40.4 billion
Tax Havens: 140 countries
Strategy: Used more than $9 billion from abroad in 2008 tax-free to finance Schering-Plough acquisition

4. Johnson & Johnson (JNJ)
Untaxed foreign profit: $37 billion
Tax Havens: Choose from 60 countries
Strategy: 48 consecutive years of dividend increases.

5. Exxon Mobil (XOM)
Untaxed foreign profit: $35 billion
Tax Havens: Does most of its business on international soil
Strategy: 80% of the company’s 2009 earnings came from outside the U.S.

6. Citigroup (C)
Untaxed foreign profit: $32.1 billion
Tax Havens: Various countries across Asia, the Middle East and Africa
Strategy: Lose Billions i crash; Garner s $45 billion bailout

7. Cisco Systems (CSCO)
Untaxed foreign profit: $31.6 billion
Tax Havens: Keeps $40 billion in cash overseas
Strategy: Lobbying for tax holiday for repatriated income

8. IBM
Untaxed foreign profit: $31.1 billion
Tax Havens: India, China, Brazil and Russia
Strategy: international expansion into smaller emerging markets

9. Procter & Gamble (PG)
Untaxed foreign profit: $30 billion
Tax Haven: China
Strategy: Overseas accounts for 58% Sales

10. Microsoft (MSFT)
Untaxed foreign profit: $29.5 billion
Tax Havens: Ireland, then the Netherlands, then Bermuda
Strategy: Double Irish and the Dutch Sandwich

Data Sources: Bloomberg, Fortune

Category: Corporate Management, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

29 Responses to “What US Companies Have the Most Untaxed Foreign Income?”

  1. wally says:

    You call them “U S companies” but that’s really not true, is it? They have no real national home or national allegiance.
    Perhaps the next step is international taxation… these companies seem to be inviting it.

  2. NoKidding says:

    If you are filing taxes in 60 countries, are you an American company or something else?

    If we tax corporations:
    Foreign corporations, and US corporations that play the games have an advantage over “honest American corporations”.

    If we tax consumption instead:
    Removes advantage of foreign corporations here AND disadvantage for local corporations abroad.
    Simplifies tax code and overhead head count.
    Removes some gaming of financial reports: big bath quarters and GAAP vs non.

    Look, if they are not paying taxes anyway (and it is clear that these big corps are not) why must we cling to evil-corporate-profit-monger populism?

  3. tagyoureit says:

    Perhaps they are anti-nationalists? Coporations do have their own culture afterall. Flags are replaced by logos. “Governed” by a board of directors “voted” in by shareholders. Coporate infrastructure, security, etc.

  4. Chad says:

    Becausing taxing consumption would literally kill some of the customers of these companies. Specifically, Pfizer, Merck, J&J, and Proctor and Gamble.

    I would also like to point out that most of those foreign profits for the drug companies are made off drugs priced lower than they are here.

  5. Lugnut says:

    Its foreign income because we have the highest effective corporate tax rate in the western world. If it were a more competitive effective rate, then those profits would be repatriated and taxed accordingly. remove all the loopholes and lower the effective rate to around 22% and it would all come ‘home’.

  6. wally says:

    “Its foreign income because we have the highest effective corporate tax rate in the western world.”

    For which we provide military defense for these corporations’ home base, police protection and an environment where personal income can be immense and untaxed and you can buy your own laws. A bargain at twice the price.

  7. Kralizec says:

    If one somehow, whether justly or unjustly, took 35% of the untaxed foreign earnings listed here, the Americans’ federal government would expend the equivalent in about 14 days. But I wonder–doesn’t everyone?–what would then happen to stock prices, and thus to capital gains tax revenues, pension funds, and all other investment funds.

    In any case, these details would seem more meaningful if the Americans’ “federal” government were already close to living within its annual means, some $2,200,000,000,000, I believe; however, it is nowhere close. And I have observed that, whatever the revenues, the appetites for expenditures are always running ahead. The Americans seem to have become so incontinent that either their social welfare programs will be ruined, or their businesses will be ruined, and then their social welfare programs, as well. It seems men take refuge in details, because the broader the scope of their considerations, the more it seems they must draw conclusions at variance with their desire to go on being free with fresh trillions of dollars each year.

  8. dan10400 says:

    Suprised GOOG doesn’t show up here.

  9. Chad says:

    @Kralizec

    Of course, the U.S. government needs to live with in it’s means. These are two seperate subjects. Just because the government is being stupid and spending too much doesn’t mean companies should not pay taxes.

  10. KJ Foehr says:

    Given the fact that much, and in some cases most, income / sales comes from foreign countries, are multi-national corporations patriotic to the USA? Are they citizens? Are they allegiant to the USA in the same way patriotic citizens are?

    No? Then why should the Supreme Court give them unlimited voice (spending) to influence elections in the USA? How much are they allowed to spend in China to influence politics / policy? Yet they fall all over themselves to do business there and bow down to Chinese government policy. So why do we let them get away with it here?

    Imo, corporations should be required to be apolitical. Influencing elections like voting itself should be the right of citizens only.

    “Justices, 5-4, Reject Corporate Spending Limit
    By ADAM LIPTAK
    Published: January 21, 2010

    WASHINGTON — Overruling two important precedents about the First Amendment rights of corporations, a bitterly divided Supreme Court on Thursday ruled that the government may not ban political spending by corporations in candidate elections.

    The 5-to-4 decision was a vindication, the majority said, of the First Amendment’s most basic free speech principle — that the government has no business regulating political speech. The dissenters said that allowing corporate money to flood the political marketplace would corrupt democracy. …”
    http://www.nytimes.com/2010/01/22/us/politics/22scotus.html

    .
    Freedom: it is our raison d’être and our Achilles’ heel.

  11. Greg says:

    So with some back-of-the-napkin calculations, it looks like just these 10 corporations would have paid an additional $143 billion in taxes, if they’d paid on all their income, like you and I do. That’s more than 10% of the US budget deficit in 2010 ($1,420 billion). This is a HUGE amount.

    This is the kind of issue that should be getting attention in Congress, rather than the navel gazing and posturing around NPR funding ($0.4 billion), family planning funding ($0.3 billion), etc.

  12. wally says:

    “The dissenters said that allowing corporate money to flood the political marketplace would corrupt democracy. ”

    Truer words never spoken. This has happened, and in remarkably short time.

  13. Greg says:

    @dan10400

    GOOG’s annual profit in 2010 was $8.5 billion. Even if ALL their profit was “overseas”, they wouldn’t have made this list.

  14. Arequipa01 says:

    US Geopolitical behavior (read rogue militarism) supports these MNCs operations. Example, US marines were almost flown into Cerro Verde’s mining concession (Freeport McMoran) in June of 2006 over the mere threat of a strike. Alejandro Toledo kiboshed the plan when he withheld permission/ diplomatic sanction- and that’s why USAID openly campaigned against him in the recent election in Peru (first round).

    These companies should all be handed a bill every quarter. For services rendered. War is racket. That is that.

  15. NoKidding says:

    “Becausing taxing consumption would literally kill some of the customers of these companies. Specifically, Pfizer, Merck, J&J, and Proctor and Gamble. I would also like to point out that most of those foreign profits for the drug companies are made off drugs priced lower than they are here.”

    Chad, how do these corps set prices?

    You realize you wrote:
    The corps already sell for less in other markets.
    Customers could not afford current prices plus consumption tax.
    Prices would stay the same, the customers would do without, and corp revenue (EPS) would slump.

    Think about it man.

  16. NoKidding says:

    To clarify:

    IF The corps base their prices on what the market is willing and able to pay
    AND A tax is introduced at the point of sale
    THEN The corps will sell less
    OR The corps will lower prices to make up the difference

    Once you point out that the corps support lower prices for the same products in other markets, you must presume than that they would do the same locally.

    I’d add to this that the biggest corps will always have the resources to create, manipulate and subvert whatever tax code you target them with. The consumer does not have that power. Aim the tax where it has a relistic shot to be collected.

    Schemes to tax big corporations work in the favor of big corporations by suppressing the ability of smaller corporations to achieve bigness. It takes a certain scale to buy a senator.

  17. [...] some quick Friday Food for Thought based on this great list of what companies have the greatest untaxed foreign income from the ever insightful Barry [...]

  18. socaljoe says:

    Pay taxes in the jurisdiction where the profit is made?… Seems reasonable to me.

  19. louis says:

    Legalized Mafia

    http://www.youtube.com/watch?v=FTrcfnJwF04&feature=related

    They just don’t have to work as hard as the gangster’s.

  20. philipat says:

    All involve Transfer pricing in one form or another. HC Company X agrees to transfer Y,000 (US) jobs to Ireland in return for a 20 year Tax holiday, thereafter a much lower than US Corporate tax rate. It then manufactures raw material Z in Ireland for, say, $1 per kilo then sells it to affiliates around the world, including the US for, say, $100 per kilo. Het presto, profits in the US go down due to a high COGS and profits in Ireland, which represnt MOST of the profit, $99 per kilo in this case, are tax free.

    This is all perfectly legal under existing tax and patent laws.

  21. pekoe says:

    I remember Regean once saying: “Corporations do not make money. People do.” Have to agree. Taxing corporations is a losing game as it incentivizes the corruption of our politics and creates a parallel universe of pre-tax corporate income (how many “business lunches”, “working vacations”, “corporate vehicles” etc would there be if PEOPLE had to pay for it with after tax income?). I say get rid of the corporate taxes entirely, fire all the tax accountants, force companies to pay income to employees and dividends to shareholders and then tax the people who get the money. Maybe put in a transfer tax to make up some of the loss. Dammed corporations hardly pay any corporate taxes anyway, and honest companies are put at a disadvantage.

  22. rktbrkr says:

    when Citi bites the hand that feeds it we give them another hand

  23. rktbrkr says:

    When GE Capital was on the ropes we waved a wand to make GE Cap a bank so we could bail them out, so similar to CITI we give them extraordinary help in addition to a tax free ride

    Jack Welch belching his free market BS on CNBC is nauseating

  24. rktbrkr says:

    Pfizer, Merck and J&J’s gain is US’s pain…

    Prescription drug prices in the United States are the highest in the world. “The prices Americans pay for prescription drugs, which are far higher than those paid by citizens of any other developed country, help explain why the pharmaceutical industry is — and has been for years — the most profitable of all businesses in the U.S…
    Prices of brand name drugs in the United States are significantly higher than in Canada, India, the UK and other countries, nearly all of which have price controls. Prices for generic drugs tend to be higher in Canada. The price differential for brand-name drugs between the U.S. and Canada has led Americans to purchase more than US$1 billion in drugs per year from Canadian pharmacies.[5]
    To save money, “U.S. Customs estimates 10 million U.S. citizens bring in medications at land borders each year. An additional 2 million packages of pharmaceuticals arrive annually by international mail from Thailand, India, South Africa and other points,” reports the Washington Post.[6] A few years ago, uninsured Americans would often purchase their cheaper medications from Canadian pharmacies. However, today, consumers shop at lower-cost online pharmacies in India, the UK, and other countries where they can save even more money—up to 60 to 80 percent or more savings off US prices.

  25. beaufou says:

    Yes, eliminate the Corporate tax because investors and executives are paying double; maybe not:
    http://www.commondreams.org/headlines06/0807-01.htm

    http://www.businessinsider.com/corporate-tax-breaks-2011-2?op=1

    As for the idea that more capital for corporations will somehow trickle down is an absolute lie.

  26. VA Voter says:

    As someone who used to run the IBM Brazil Desk 20 odd years ago, there are (used to be) 60% repatriation taxes for pulling cash back to the U.S.

    Don’t think companies want to leave these profits where the incremental return is very low due to the high costs of currency hedging. The dollar used to be a strong currency.

    Even after U.S. taxes the potential net returns on this unrepatriated capital would be much higher back here in the U.S. except for emerging country capital flow restrictions and repatriation taxes.

  27. Sunny129 says:

    Democracy is a farce, elections are a joke and Country ruled by Corporatocracy via K-Street.

  28. [...] The American companies that have the most untaxed foreign income. [...]

  29. dingsfo says:

    Google should have easily made top 10

    This list needs updating …..