Technology giants led by Apple and Microsoft disclosed more than $100 billion in profit outside the U.S. in their last fiscal years, making them prime targets of President Joe Biden’s proposals to boost taxes on earnings stashed overseas. From a report: The tax proposals, unveiled this month to help foot the bill for massive infrastructure plans, target common tactics used by U.S. multinationals such as stashing income-generating assets in low-tax offshore jurisdictions. The tech industry is particularly adept at shifting profits to tax-friendly locales because its main assets — software code, patents and other intellectual property — are relatively easy to move around compared to factories and other physical assets.
Former President Donald Trump’s 2017 Tax Cuts and Jobs Act was supposed to crack down on offshore tax maneuvering, but Republicans neutered the rules by adding extra deductions and other benefits, according to Andrew Silverman, a tax policy analyst at Bloomberg Intelligence. Big Tech will find it harder to dodge Biden’s plan because, if turned into law, it would close most of the loopholes left by Trump’s 2017 legislation. The move threatens to leave the industry further at odds with Washington, where lawmakers are already scrutinizing the spread of misinformation on online platforms and regulators are embarking on antitrust investigations into large tech companies.
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