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ashishkhanna168
US multinational companies and wealthy people have permission to transfer their money from the USA to overseas banks to make more profit on their savings. There are many large public companies that already earn huge amounts of money from foreign banks like those in The Netherlands, the Cayman Islands, Bermuda and US Virgin Islands. It is legal for everyone because companies pay taxes to foreign governments on their profits at offshore saving. In addition, companies bring back their money from foreign countries to the USA after paying differential tax amounts. US corporations should be permitted to cover their profits to avoid paying US taxes because it is legal according to law. Companies are paying their taxes as per their country’s law. There are many US multinational companies and rich individuals want should be thankful to government because they can avoid paying federal and state taxes and save billions of dollars annually using tax havens. According to Povich, Companies chose those countries like the Cayman Island or Bermuda to invest their money because those countries have less or no taxes on income. Therefore, US organizations save approx. 50-60% US taxes on their income to deposit their money in those countries. Moreover, Ireland is also one of the famous place for tax sheltering because taxes are low in Ireland around 12.5% (Sullivan, 2013). Its approx. one-third from the USA. So, companies can produce more money to avoid paying taxes in the USA. How companies can produce money? Sullivan said that US multinational companies make new manufacturing facility to other countries like Ireland or Bermuda to reduce their taxes and make more money like if company earn profit $10 million in Ireland then it has to pay legally $1.25 million in tax instead of $3.5 million in the USA but companies are still not satisfy to save approx. 60% tax because they can save approx 100% tax to open their new manufacturing unit in Bermuda, said Sullivan. Government are planning to stop offshore tax sheltering and close the loopholes but I believe everybody have right to save their money.
US multinational companies generate billions of dollars through offshore tax shelter. According to Drucker (2011), Companies like Google, Pfizer, Lilly, Oracle, Facebook, and Microsoft avoid paying taxes in the USA to make more money. In last three years, Google earned $3.1 billion to transferred its huge profit to Ireland, the Netherland and Bermuda to earn more money with the help of expert advice and methods called “the Dutch Sandwich” and “the Double Irish”. Google deposit major chuck of amount in Ireland banks, which is generate by non-USA sales, said Drucker. Companies always spend this money for development of the country like open new office, create jobs, etc. Therefore, people spending power increase after getting jobs and its stimulate economy. Moreover, Companies are paying taxes legally in respected countries rather than avoiding USA taxes. Whenever these organizations want to use non-USA profit money for their USA office then they have to pay differential tax to US government. Drucker reported that sometimes companies get tax holiday benefit from government, it means companies get permission to shift their money upto 1 trillion dollars from other countries to USA on low interest rate. Companies use financial techniques to save their money as per US law.
Companies are glad to transfer
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By: ashishkhanna168
Submitted: March 2, 2016
Essay Length: 921 Words / 4 Pages
Paper type: Research Paper Views: 407
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