The 500 largest US companies hold over $2.1 trillion in accumulated profits offshore to avoid US taxes and would collectively owe an estimated $620 billion in US taxes if they repatriated the funds, according to a study released today.
According to the study conducted by two non-profit groups, nearly three-quarters of the firms on the Fortune 500 list of biggest US companies by gross revenue operated tax haven subsidiaries in countries like Bermuda, Ireland, Luxembourg and the Netherlands.
The Center for Tax Justice and the US Public Interest Research Group Education Fund reached the conclusion on the basis of the companies' own financial filings with the Securities and Exchange.
Technology firm Apple held the largest amount ($181.1 billion) among the firms, and would owe an estimated $59.2 billion in US taxes if it were to bring the money back to the US from its three overseas tax havens, the study said.
General Electric held $119 billion offshore in 18 tax havens, software firm Microsoft held $108.3 billion in five tax haven subsidiaries and drug giant Pfizer had $74 billion in 151 subsidiaries.
"At least 358 companies, nearly 72 per cent of the Fortune 500, operate subsidiaries in tax haven jurisdictions as of the end of 2014," the study said. "All told these 358 companies maintain at least 7,622 tax haven subsidiaries."
"Congress can and should take strong action to prevent corporations from using offshore tax havens, which in turn would restore basic fairness to the tax system, reduce the deficit and improve the functioning of markets," the study concluded.
The release of the report comes as G20 finance ministers meet in Lima, Peru, to finalise new international tax rules designed to close corporate tax loopholes.
According to the projections of the Organization for Economic Co-operation and Development, tax loopholes allow companies around the world to legally dodge as much as $240 billion in taxes per year.
Though the proposed rules, which had been under preparation for two years, had been praised by many observers, some say they had not gone far enough.
"The current reform efforts ... [take] steps in the right direction but much more needs to be done to address the core deficiencies of our system for taxing global corporate profits," said Joseph Stiglitz, a professor and Nobel Prize winning economist, money.cnn.com reported.