Cash expands by $187b in untaxed offshore accounts

Image representing Pfizer as depicted in Crunc...

U.S. companies led by General Electric Co. (GE) and Pfizer Inc. (PFE) stockpiled an additional $187 billion in untaxed overseas profits over the past year, boosting their offshore holdings by 18.4 percent, according to data compiled by Bloomberg.

The 70 U.S.-based companies studied hold $1.2 trillion in profits around the world. GE and Pfizer have built up the most money outside the U.S., at $102 billion and $63 billion respectively, according to securities filings. Apple Inc. (AAPL), Google Inc. (GOOG) and Microsoft Corp. (MSFT) were among the companies that increased their accumulated overseas profits by more than 40 percent in 2011.

As U.S.-based companies expand globally, they keep profits overseas, legally out of the reach of the Internal Revenue Service. Lawmakers from both political parties point to the stockpiling as a symptom of a failed corporate tax system, even while they remain deadlocked over whether the U.S. should impose higher or lower taxes on its companies’ global profits.

“You’re seeing more and more business go on overseas, because that’s where an increasing amount of the global purchasing power is,” said Matt Miller, director of public policy at the Business Roundtable, a Washington-based association of chief executives at large companies that backs lower taxes on overseas profits. “We need to get a competitive tax system that is not antiquated and has all the complexities we have today.”

via Cash Horde Expands by $187 Billion in Untaxed Offshore Accounts – Bloomberg

Top tips for filing your 2011 tax return

Logbook aboard the frigate Grand Turk.

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Don’t wait until the last day of submission to file your return. In the past the e-filing server could not handle all the traffic on the last day. As a result, many people were unable to submit their returns on time. SARS will not give extended deadlines;

Disclose everything, even the smallest amount of interest. Many people also don’t disclose a lump sum paid out by a pension/provident fund. This will cause SARS to include the taxable amount in the assessment, but disallow the tax deducted from it, which will result in the taxman claiming a large sum of money;

Get your medicalaid claim right. A common error is to not show how many members were on the medical aid during the year. This must be completed to ensure that SARS applies the correct tax break for all members concerned;

When there is a medical-aid code 4005 on your IRP5, you are not allowed to insert your medical contributions again (next to code 4040) in the medical-aid section of the tax return. You must insert a “0” in this column;

It is compulsory to keep a detailed travel logbook to show all the kilometres travelled for work, and make sure it is up to date. It is against the law to prepare a logbook with incorrect figures or to ask someone (even your tax consultant) to compile one for you;

When completing your travel claim, make sure to use either the actual cost method or the travel claim method. When using the travel claim method, do not fill in any actual costs like fuel, maintenance costs or wear and tear. SARS will use the default calculation on the actual costs. In most cases the travel claim method is the most effective way to claim against your travel allowance;

If you have been out of South Africa for more than 183 days, of which 60 days must be consecutive, you are allowed to claim a foreign exemption under section 10(1)(o)(ii).

Initially, SARS will disallow the claim, which will result in an assessment showing a large amount due to SARS. You will have to object to this assessment to claim for the exemption. You also need to submit copies of your passport, employment contract and a breakdown of the days you were out of the country as supporting documents;

via Top tips for filing your 2011 tax return – Business LIVE