Business

Cash abroad rises to $206 billion as Apple to IBM avoid taxes

WASHINGTON — The largest US-based companies added $206 billion to their stockpiles of offshore profits last year, parking earnings in low-tax countries until Congress gives them a reason not to.

The multinational companies have accumulated $1.95 trillion outside of the United States, up 11.8 percent from a year earlier, according to securities filings from 307 corporations reviewed by Bloomberg News. Three US-based companies — Microsoft, Apple, and IBM — added $37.5 billion, or 18.2 percent of the increase.

Advertisement

‘‘The loopholes in our tax code right now give such a big reward to companies that use gimmicks to make it look like they earn their profits off shore,’’ said Dan Smith, a tax and budget advocate at the US Public Interest Research Group, which seeks to counteract corporate influence.

Even as governments around the world cut tax rates and try to keep corporations from shifting profits to tax havens, Congress remains paralyzed in its efforts. The response of US-based companieshas been consistent: Book profits off shore and leave them there.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

Congress hasn’t acted because of disagreements over whether to be tougher on US companies operating abroad amid broader disputes over government spending and taxation. The stalemate has prevented lawmakers from tapping a pot of money that President Obama and the top Republican tax writer, Representative Dave Camp, have eyed for such projects as rebuilding highways.

Britain and Japan are reducing their corporate tax rates and making it easier for companies to bring money home. The US rate is 35 percent, but companies frequently use tax breaks to avoid paying that.

Bloomberg News

Loading comments...
Real journalists. Real journalism. Subscribe to The Boston Globe today.