Bankrupt Puerto Rico Is A Prime Offshore Tax Haven For Microsoft

Microsoft's Offshore Profit Pile Surges Past $100 Billion Mark
WASHINGTON, D.C. (AUGUST 4, 2015)
BY RICHARD RUBIN
BLOOMBERG

(Bloomberg) Microsoft Corp.’s stockpile of offshore profits rose to $108 billion, with a 17 percent increase over the past year as the company continues reaping profits in low-tax foreign jurisdictions.

The company crossed the $100 billion mark, making it just the second U.S. corporation—after General Electric Co.—to do so, according to a securities filing July 31. Apple Inc. has more cash abroad than Microsoft, but it already has assumed for accounting purposes that it will pay tax on some of the stockpile and thus has less than $70 billion offshore that would affect earnings directly if repatriated.

What’s keeping Microsoft’s cash abroad is the U.S. tax code. The company would be required to pay the difference between its foreign taxes and the 35 percent U.S. corporate tax rate if it brought the money home.

The Internal Revenue Service and Microsoft are in the midst of an intense legal battle over the company’s transfer pricing, or intracompany transactions. The federal government is auditing the company’s returns as far back as 2004, and Microsoft has challenged the government’s hiring of outside lawyers.

U.S. companies have more than $2 trillion amassed outside the U.S., according to a Bloomberg News review earlier this year of the securities filings of 304 companies.

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Microsoft's Offshore Profit Pile Surges Past $100 Billion Mark

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