Nearly three-quarters of Fortune 500 companies held some cash overseas last year, according to a new study, with tech giant Apple (NASDAQ:AAPL) leading the pack.
Seventy-three percent of Fortune 500 companies, or 366 businesses, operated one or more subsidiaries in tax haven countries in 2016, according to research by The U.S. PIRG Education Fund and the Institute in Taxation and Economic Policy. These 366 companies collectively maintained more than 9,750 tax haven subsidiaries, and the 30 companies with the most money stashed overseas operated more than 2,210 offshore divisions, according to the study. Some of the most popular destinations included the Cayman Islands and Bermuda, where more than half of companies with tax haven subsidiaries maintained an outpost.
The two groups found that collectively, U.S. companies had $2.6 trillion stored in tax havens last year, and 30 companies alone accounted for 68% of those offshore profits. Meanwhile, just four companies make up 25% of that total: Apple, Pfizer (NYSE:PFE), Microsoft (NASDAQ:MSFT) and General Electric (NYSE:GE).
Apple, the biggest offender, alone held $246 billion offshore, which means it would owe more than $76 billion in taxes to the U.S. government if that money was onshore. Pfizer has 157 tax haven subsidiaries, which cumulatively hold nearly $200 billion in profits offshore.
Only 58 of the 366 companies with money offshore officially disclose what they would pay in U.S. taxes if they brought that money back onshore. These companies owe $240 billion in additional federal taxes, according to data analyzed in the report. Applying the same rate to the remaining companies would mean $752 billion would be owed to the U.S. government, if all of the money was repatriated at once.
President Donald Trump and his administration have been working to make the U.S. a more attractive investment opportunity for companies by reforming the tax code. One of the major ways they hope to do that is by lowering the corporate tax rate, from the current 35% to 20%. The GOP said this would spur investment and create job opportunities across the country.
The U.S. PIRG also says Congress can act promptly to eliminate loopholes in the tax code that allow corporations to use tax havens.