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There's no such fiduciary duty to internationally minimize tax liability. Shareholders might push for it, but it's not a legal fiduciary duty. The board of an A

There's no such fiduciary duty to internationally minimize tax liability. Shareholders might push for it, but it's not a legal fiduciary duty. The board of an American company could perfectly well choose to repatriate all foreign income, pay U.S. taxes on it, and then pay out a dividend using the repatriated income. That would even be the more traditional course of action, rather than sitting on a ton of overseas cash that you never pay out to shareholders.

concede_pluto 9y ago
What exactly counts as repatriating income? Could a foreign subsidary buy shares of the US entity (akin to a buyback) instead of putting money into the US entity's treasury? Not that I'm a fan of playing games with the market cap rather than rewarding owners... Edit: apparently the IRS did not take kindly to IBM doing exactly this: https://seekingalpha.com/article/893331-how-microsoft-can-free-its-foreign-source-cash-and-return-it-to-shareholders https://seekingalpha.com/article/893331-how-microsoft-can-fr...
prostoalex 9y ago
> The board of an American company could perfectly well choose to repatriate all foreign income, pay U.S. taxes on it, and then pay out a dividend using the repatriated income. Considering US corporate tax rate is among the highest in the world, Apple, GM and Coca-Cola have to pay a higher repatriation tax than Samsung, Toyota or Nestle. This seems to give foreign companies a strategic advantage as far as having larger R&D budgets, flexibility to drop prices, etc.