Report: U.S. companies keeping $166 billion in offshore tax shelters

US companies are keeping more of their profits offshore, choosing overseas tax havens amid talk in Washington about closing corporate tax loopholes, The Wall Street Journal reported Monday.

The business newspaper said its analysis of 60 big American companies had found that they had collectively parked a total of $166 billion offshore last year.

That shielded more than 40 percent of their annual profits from US taxes, the report said.

Each of the 60 companies chosen for the analysis had held at least $5 billion offshore in 2011, according to The Journal.

The list included Abbott Laboratories, whose store of untaxed overseas earnings rose by $8.1 billion, to $40 billion, the paper said. The increase exceeded the pharmaceutical maker's net income of $6 billion.

Industrial conglomerate Honeywell International Inc. boosted its store of untaxed earnings held by its offshore subsidiaries and earmarked for foreign investment by $3.5 billion last year to $11.6 billion, a rise equal to the company's annual profit, excluding a pension adjustment, The Journal said.

The practice is a result of US tax rules that allow companies to not pay taxes on profits earned by overseas subsidiaries if the money is not brought back to the United States, the report pointed out.

["Businessman with money" via Shutterstock]