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The incentive to buy back shares rather than paying dividends might be even stronger, especially if -- and that word "if" is very important here -- the company can buy back its shares on foreign markets without repatriating assets that would become subject to taxation if repatriated.

They can't. Much too obvious a dodge. You can't buy US stocks with foreign profits without "bringing the money in" and declaring it. (It's a bit complicated: foreign companies are invariably subsidiary corporations of the parent corporation, and any monies they have have to be sent to the parent as "dividends" - although as the link below indicates they may be lent "short term" without tax implications. HP was doing that, and (in my view) is guilty of a tax dodge, and I should think would be liable for the amounts they have been playing with.)

When I was with Westinghouse we would play these games, although I was not involved with anything international, my division did this between states: pairing profitable business units with unprofitable ones [actually profitable, just depreciating their acquisition price to appear unprofitable for tax purposes] so as to minimize the tax bite, and depending on which states had higher rates or lower, showing the inevitable profit somewhere, preferably in the lowest jurisdiction. Our "subsidiary corporations" would change regularly, but no employee ever saw anything of it and it had no impact on our business operations. I would suspect that 100% of them minus one or two (local controllers & GM's) wouldn't even have known.

Anyway, the link is a pretty good explanation of the whole thing:
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