What Is Repatriation of Profits?

by Tim Plaehn; Updated September 26, 2017
Activists Call For Apple To Pay Taxes On Money Held Overseas

The U.S. corporate tax code requires a company to pay taxes on the net profits it generates anywhere in the world. However, the profits from international operations are not taxed until the money is brought into the U.S. Repatriation is the process of bringing profits earned abroad into the U.S.

Avoiding The High U.S. Corporate Tax Rate

The U.S. has one of the world's highest corporate tax rates at 35 percent. Corporations avoid paying this rate on foreign earnings by leaving the money offshore. Repatriation of a significant portion of the more than $1 trillion in profits that have not been brought into the country would generate large amounts of tax revenue for the federal government. Political discussions revolve around the idea of giving tax breaks on profits that are repatriated and would then provide money to stimulate the economy.

About the Author

Tim Plaehn has been writing financial, investment and trading articles and blogs since 2007. His work has appeared online at Seeking Alpha, Marketwatch.com and various other websites. Plaehn has a bachelor's degree in mathematics from the U.S. Air Force Academy.

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