Repatriation of Foreign Earnings

Corporate Taxation on Cash Repatriated from Overseas Operations 

Cash trapped overseas is preventing U.S. companies from hiring U.S. workers and investing in the U.S., according to a recent survey from the Association for Financial Professionals. High U.S. corporate tax rates create an incentive for companies to leave cash abroad, often permanently, AFP members say.

In follow-up questions to AFP's recent 2011 Business Outlook Survey, 26% of respondents with operations abroad say that excessive U.S. corporate tax discourages their organization from bringing cash back to the U.S. and using it to invest in corporate growth in the form of new hires, capital investments, or research and development.

Proponents of the current tax rates on repatriated foreign earnings say the tax deters companies from making investments in non-U.S. operations and stems the flow of American-based jobs overseas, but AFP members indicate that this is not the case. Of those with non-U.S. operations responding to the survey, two-thirds indicate that the tax on repatriated foreign earnings at current rates has little to no impact on the decision to begin or continue operations outside of the U.S.

• 2011 AFP Business Outlook Policy Supplement 
• AFP's Policy Position on Repatriation 
• 112th Congress Repatriation Letter 
• "Big Tax on Overseas Earnings Means Fewer U.S. Jobs, Finance Pros Say"
  AFP tells Congress how a deterrent to moving jobs abroad may be backfiring. 

Questions about the impact of corporate tax on cash repatriated from overseas operations? Contact Jeanine Arnett, AFP's Director of Government Relations and Public Policy via jarnett@afponline.org or 1.301.907.2862