MasterCard’s Case
Executives at MasterCard Inc. have regular meetings about managing the company’s so-called trapped cash, Martina Hund- Mejean, the chief financial officer, said at a tax conference in Washington last month.
MasterCard, based in Purchase, New York, processes transactions from more than 210 countries and territories and earned 39 percent of its revenue in the U.S. in 2013. The company reported $3.5 billion in untaxed profits outside the U.S. as of Dec. 31, up from $2.6 billion a year earlier.
When the company considers investment opportunities around the world, Hund-Mejean said, it stress-tests those with a worst- case scenario under which tax would be paid on repatriated foreign profits.
“That’s a huge disadvantage being a U.S.-based company,” she said, adding that companies based in other countries don’t have the same challenge. “That is a direct competition and it’s a direct cost to us.”
22 Companies
The bulk of the offshore profits are held by a relatively small number of companies. The top 22 corporations in the analysis have more accumulated earnings outside the U.S. than the other 285 combined.
Kristin Huguet, a spokeswoman for Apple, and James Sciales, a spokesman for IBM, didn’t respond to requests for comment.
Microsoft pointed to September 2012 congressional testimony by Bill Sample, corporate vice president for worldwide tax, who said Microsoft complies with tax laws. He said the company’s “tax results follow from its business, which is fundamentally a global business that requires us to operate in foreign markets in order to compete and grow.”
To prevent double-counting, the Bloomberg analysis adjusted the end-of-2012 figure for Abbott Laboratories to subtract $19.4 billion that went to AbbVie Inc. when the companies split.