The US Territory of Puerto Rico, with 3.5 million US citizens has been coded as a Foreign Country by this establishment so they have an offshore tax shelter for tax evasion with the benefit of US protection. This is a scam to the US Tax payer.
I also ask, if these companies, who make business in Puerto Rico make such extraordinary amount of money..... how come Puerto Ricans are under the poverty line with uneployment at >17% and per-capita at $14,000.
If this is so good for the economy, how come 600,000 persons left Puerto Rico in the last decade and relocated to one of the 50 states?
MJ
By Drew Armstrong BLOOMBERG NEWS 12:01 A.M.APRIL 24, 2013
Overseas stash
In 2012, the six most-profitable pharmaceutical companies avoided paying $7.05 billion in U.S. taxes by shifting profits offshore, almost double the amount they saved in 2003.
$1.96B - Merck
$1.89B - Johnson & Johnson
$1.56B - Abbott
$688M - Bristol-Myers Squibb
$594M - Eli Lilly
$362M - Pfizer
The six biggest U.S. drugmakers avoided paying $7.05 billion in U.S. taxes last year by shifting their profits overseas. That’s almost double the amount they saved using the same strategy 10 years earlier, according to data compiled by Bloomberg.
For years, multinationals such as Pfizer, Merck and Johnson & Johnson have been moving ownership of patents and trademarks to subsidiaries in low- or no-tax countries. This has allowed drug companies, as well as businesses in several other industries, to skirt paying U.S. taxes on sales of those products unless the money is returned home.
While the practice of shifting assets and profits overseas is legal, that could change. As the trend continues to grow in an era when the government is desperate to raise revenue, the strategy has drawn the ire of legislators eager to shut it down.
“The right kind of tax reform could do a lot to bring corporate profits back to the United States for investment and job creation,” said Sen. Chuck Grassley, R-Iowa. “The current system provides an incentive for companies to keep money overseas indefinitely.”
Merck and J&J were the biggest drug company winners in 2012 with savings of about $2 billion each attributable to the strategy, according to regulatory filings. The reports by the six drugmakers, filed in February, come as U.S. lawmakers are debating potential tax code changes designed to shrink the federal budget deficit and crank up job-producing business activity in the U.S.
UNTAXED PROFITS
Eighty-three companies have stockpiled $1.43 trillion in untaxed profits in foreign countries, according to data compiled by Bloomberg. The leader is General Electric, which said in a Feb. 26 filing it has $108 billion sitting overseas.
Among drugmakers, Pfizer reported having $73 billion abroad, Abbott Laboratories $40 billion and Bristol-Myers Squibb and Eli Lilly $21 billion each.
Republicans such as Grassley and Michigan’s Rep. Dave Camp, the chairman of the House Ways and Means Committee, want to encourage companies to repatriate their stockpiles in the hope that bringing the money home will lead to investment and job creation.
President Barack Obama’s 2014 budget blueprint — presented this month — has a tax code revamp that includes proposals to raise hundreds of billions of dollars from U.S. multinational corporations that avert tax on income held overseas. The task involves scrubbing the code of breaks to fund a cut in the top corporate income tax rate — by limiting the ability of companies to defer tax on foreign income and tightening foreign tax credit rules among other things.
Legislation is expected this year in the U.S. House of Representatives and possibly the Senate.
$1.89B - Johnson & Johnson
$1.56B - Abbott
$688M - Bristol-Myers Squibb
$594M - Eli Lilly
$362M - Pfizer
The six biggest U.S. drugmakers avoided paying $7.05 billion in U.S. taxes last year by shifting their profits overseas. That’s almost double the amount they saved using the same strategy 10 years earlier, according to data compiled by Bloomberg.
For years, multinationals such as Pfizer, Merck and Johnson & Johnson have been moving ownership of patents and trademarks to subsidiaries in low- or no-tax countries. This has allowed drug companies, as well as businesses in several other industries, to skirt paying U.S. taxes on sales of those products unless the money is returned home.
While the practice of shifting assets and profits overseas is legal, that could change. As the trend continues to grow in an era when the government is desperate to raise revenue, the strategy has drawn the ire of legislators eager to shut it down.
“The right kind of tax reform could do a lot to bring corporate profits back to the United States for investment and job creation,” said Sen. Chuck Grassley, R-Iowa. “The current system provides an incentive for companies to keep money overseas indefinitely.”
Merck and J&J were the biggest drug company winners in 2012 with savings of about $2 billion each attributable to the strategy, according to regulatory filings. The reports by the six drugmakers, filed in February, come as U.S. lawmakers are debating potential tax code changes designed to shrink the federal budget deficit and crank up job-producing business activity in the U.S.
UNTAXED PROFITS
Eighty-three companies have stockpiled $1.43 trillion in untaxed profits in foreign countries, according to data compiled by Bloomberg. The leader is General Electric, which said in a Feb. 26 filing it has $108 billion sitting overseas.
Among drugmakers, Pfizer reported having $73 billion abroad, Abbott Laboratories $40 billion and Bristol-Myers Squibb and Eli Lilly $21 billion each.
Republicans such as Grassley and Michigan’s Rep. Dave Camp, the chairman of the House Ways and Means Committee, want to encourage companies to repatriate their stockpiles in the hope that bringing the money home will lead to investment and job creation.
President Barack Obama’s 2014 budget blueprint — presented this month — has a tax code revamp that includes proposals to raise hundreds of billions of dollars from U.S. multinational corporations that avert tax on income held overseas. The task involves scrubbing the code of breaks to fund a cut in the top corporate income tax rate — by limiting the ability of companies to defer tax on foreign income and tightening foreign tax credit rules among other things.
Legislation is expected this year in the U.S. House of Representatives and possibly the Senate.
The federal corporate income tax in the U.S. is 35 percent. Last year, the six biggest drugmakers cut their effective rate by more than half, a record for the decade, according to a review of 10 years of filings by Bloomberg News. The filings also show that tax avoidance strategies make up a significant portion of the profits that investors use to assess drugmakers’ profitability. Spokesmen for the six drugmakers declined to comment.
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