Mist shrouds moorland in the Glens of Antrim, Ireland on Oct. 2, 2010. Reuters/Cathal McNaughton

Major U.S. technology companies, including Apple (NASDAQ:AAP) and Microsoft (NASDAQ:MSFT), have invested an estimated $163 billion in U.S. government debt -- $124 billion in U.S. Treasury securities and $39 billion in U.S. government agency debt -- earning them billions in interest on cash and other forms of liquid assets held by companies abroad to avoid tax at home.

According to U.S. Securities and Exchange Commission, or SEC, filings, Apple, Microsoft, Google (NASDAQ:GOOG) and Cisco Systems (NASDAQ:CSCO) hold as much as $255 billion in cash, cash equivalents and marketable securities in their foreign subsidiaries. The amount could lead to a considerably large tax bill under the current U.S. corporate tax rate of 35 percent if brought onshore, the UK's Bureau of Investigative Journalism, or BIJ, reported on Wednesday, adding that there is no suggestion that these activities are against the law.

“If a US multinational puts its offshore cash into a US bank and uses the money to buy US treasuries, stocks and bonds, those funds ought to be treated as having been repatriated and subject to US tax,” BIJ quoted Democratic party Senator Carl Levin (D-Mich.) as saying.

If the money is brought home and taxed, it would produce an $89 billion windfall in tax revenues for the U.S. Treasury, and it would be equivalent to 17 percent of the country’s projected $514 billion budget deficit for 2014, BIJ reported.

While companies such as Apple have lobbied for changes so they would not have to pay tax on income earned outside the U.S. and brought home, many European countries only tax income that is earned within their borders, Reuters reported.

Offshore Cash Holdings On The Rise

According to a report from Bloomberg, leading U.S. companies added $206 billion to their stockpiles of offshore cash in 2013, parking earnings in low-tax countries. The report said companies, including Apple, Microsoft and International Business Machines, or IBM (NYSE:IBM), accumulated $1.95 trillion in cash reserves outside the U.S., which is up 11.8 percent from a year earlier.

Over the last three years, Microsoft’s offshore profits have more than doubled, while Apple’s have more than quadrupled. Google’s profits, held offshore, have more than doubled during the same period to $38.9 billion from $17.5 billion.

According to Bloomberg, while governments around the world, including the UK and Japan, have cut tax rates to discourage companies from moving profits abroad to low-tax countries, the U.S. government has not acted to do so. Ireland has a corporate tax rate of 12.5 percent, compared with 35 percent in the U.S., which makes it an increasingly attractive tax haven.

Reports surfaced last week saying Apple -- in a bid to save taxes -- allegedly moved nearly 9 billion Australian dollars ($8.2 billion) in gross profits from its operations in Australia to Ireland in the last 10 years.

Companies’ Response

Google said it availed tax incentives offered by governments while obeying tax rules in every country it operates in. Apple, Microsoft and Cisco said they pay all the taxes that are due to the U.S. government.

“Microsoft complies with the tax rules in each jurisdiction in which it operates and pays billions of dollars each year in total taxes, including U.S. federal, state, and local taxes and foreign taxes,” a Microsoft spokesman told BIJ.