Biggest Tax Avoiders Would Win on U.S. Tax Break. Cisco Systems Inc. (CSCO) has cut its income taxes by $7 billion since 2005 by booking roughly half its worldwide profits at a subsidiary at the foot of the Swiss Alps that employs about 100 people. Now Cisco, the largest maker of networking equipment, wants to save even more -- by asking Congress to waive most federal taxes due when multinationals bring such offshore earnings home. Chief Executive Officer John T. Chambers has led the charge for the tax holiday, which would be the second since 2004. He says it would encourage companies to “repatriate” as much as $1 trillion held abroad, spur domestic investment and create jobs. Cisco’s techniques cut the effective tax rate on its reported international income to about 5 percent since 2008 by moving profits from roughly $20 billion in annual global sales through the Netherlands, Switzerland and Bermuda, according to its records in four countries.
John Chambers, chief executive officer of Cisco Systems Inc., speaks at the Global... Close.
The Intelligent Investor: Why Companies Are Hoarding Cash. IRS Raises Interest on Underpayments - The Federal Reserve isn’t the only government entity hiking rates these days. The Internal Revenue Service announced that in the fourth quarter, corporations and individuals will pay 5 percent interest for underpayments on taxes, a boost of 1 percentage point from the present quarterly level. For “large corporate underpayments” — those over $100,000 for the period — the new rate will be 7 percent, also a 1 percentage point increase. In the case of tax overpayments, the IRS will reimburse corporations at the rate of 4 percent, while individuals will get 5 percent.
The portions of corporate overpayments exceeding $10,000 will be paid 2.5 percent in interest. Under the Internal Revenue Code, the interest rate is gauged on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rates are the federal short-term rate plus 3 percentage points. Dodging Repatriation Tax Lets U.S. Companies Bring Home Cash.
International Tax Attorney, Lawyer, Tax Consultant, Tax Advisor -- Andrew Mitchel LLC, Connecticut.