US multinational companies continue to accumulate more earnings in offshore holding companies.

A Bloomberg survey of securities filings by 307 of S&P 500 companies found the companies have $1.95 trillion parked offshore. The earnings would be taxed if repatriated to the United States. The 307 companies added another $206 billion in 2013, up 11.8% from the year before. The increase in profits held outside the United States is particularly noticeable among technology companies, which put their intellectual property offshore.

The Congressional Research Service, an arm of the US Library of Congress, reported in 2013 that US multinationals attributed 43% of their 2008 overseas profits to just five countries: Bermuda, Ireland, Luxembourg, the Netherlands and Switzerland.

Switzerland is under pressure from the European Union to revise the corporate income taxes charged by Swiss cantons. Favorable rates for foreign companies act as an inducement to locate in Switzerland. The European Commission declared in 2007 that the current tax regime violates a 1972 free trade agreement between the European Economic Community and Switzerland.

Some companies are leaving Switzerland without waiting for higher rates to hit. Yahoo announced plans in February to move its European website services from Switzerland to Ireland. Ireland has a 12.5% corporate tax rate. Other internet companies like Google and Facebook are already there. Noble Corp., an offshore drilling contractor, announced plans to move its headquarters from Switzerland to the United Kingdom, which also has a favorable headquarters regime.

Meanwhile, some US states are trying to tax corporate income parked in offshore havens. The states have grown impatient with stalled efforts in the US Congress to rewrite the rules for taxing income that US companies earn in other countries.

Oregon enacted a bill for the 2014 tax year identifying 39 countries and territories as tax havens. Montana has had a similar law for a decade. The Maine legislature voted for a similar bill on April 4. Minnesota and Rhode Island are studying similar measures. None of the states that has passed such bills to date is home to many large multinational corporations.

By Keith Martin