10 U.S. Companies With Lowest International Tax Rates

WalletHub recently released an analysis of tax rates paid by the 100 largest firms and found S&P 100 companies pay about 22% less on international taxes than U.S. taxes.

Furthermore, tech companies like Apple and eBay are paying up to 70% lower rates internationally.

To compile the list, WalletHub used data from each company’s 2013 annual report, identifying the revenues, tax payments and deferral amounts at state, federal and international levels. The WalletHub report also used data provided by the Internal Revenue Service, Quantria Strategies and Yahoo Finance.

The Treasury Department and the Internal Revenue Service issued guidance last month to dissuade companies from taking their operations overseas to avoid paying some taxes here. As part of the report, WalletHub asked tax experts if taking corporate inversions was unpatriotic or just a good business move.

Douglas Kahn, the Paul G. Kauper Professor of Law at The University of Michigan Law School, pointed out that it’s “not unpatriotic to take legal and legitimate steps to reduce one’s tax liability.” He said inversions are a way for companies to avoid a “bad tax system that punishes foreign investment.”

The major benefit of inversion is not so much a reduced tax rate, but the avoidance of world-wide taxation. It is an effort to submit foreign income exclusively to foreign taxation in order to better compete with foreign businesses,” according to Kahn.

Mary Margaret Frank, associate professor of business administration for the Darden School of Business at the University of Virginia, recommended caution before labeling companies like Burger King “unpatriotic.”

(Check out Is Warren Buffett a Hypocrite on Taxes? on ThinkAdvisor.)

“This is at least the third wave of inversions,” she said. “This wave of ‘inversions’ is characterized by acquisitions of domestic companies by foreign acquirers. However, what is the line between an acquisition and an inversion? If we aren’t careful, our fears of unpatriotic corporate behavior could drive us to implement poor policies that only worsen the economy by limiting the flow of capital to where it is needed.”