CNBC:
According to FactSet, as of the end of the first quarter of 2017, Apple has taken on more than $98 billion in debt.
And:
Apple generates cash flows of nearly $40 billion every six months. It’s the richest company in the world, with more than $256.8 billion in cash and marketable securities sitting on its books.
Why does such a rich company have to borrow money?
And:
As of the end of 2016, Apple had more than $230 billion stored overseas. That’s because, when Apple earns money from sales outside the U.S., it’s taxed once by the country where it makes those sales, then taxed again by the U.S. when it brings the money back home. As a result, Apple doesn’t bring that money home.
This from Tim Cook, in his recent interview with Jim Cramer:
If you sell globally, you earn money globally. If you earn money globally, you can’t bring it back into the United States unless you pay 35 percent plus your state tax. And you look at this and you go, ‘This is kind of bizarre.’ You want people to use this money in the United States to invest more. We are in a good position, but an unusual one. Our good position is we can borrow. And so to invest in the United States, we have to borrow. This doesn’t make sense on a broad basis.
Complicated problem. If that 35% rate is dropped to the rumored 10%, would that be enough to repatriate all that cash?
It is not “taxed by the country where it makes those sales.” It is taxed in Ireland, for the most part, where Apple has a scandalously low rate of tax, giving them an unfair competitive advantage, and depriving the countries where they sell their products of taxes.
Apple borrows at 1.8-3.2%. Even when that’s compounded continuously, Interest on bonds costs them less than a third of what a flat 10% tax would.
Why should the US charge international businesses 35% on already taxed money?
Apple has one of the highest profit margins in the world and has shown time and again it feel at least some ethical responsibility for its actions. If it is engaging in this behavior it demonstrates just how broken and antiquated the taxation system is regarding global corporations.
Notice how Goolge (and a number of other large companies) get a pass on this…
Total bullshit, bordering on spam.
oye … it is taxed in China or Ireland or where ever – giving any company that can use these options an advantage.
Maybe you should let the EU and the world know about these problems?
I’m sure you don’t take advantage of any tax breaks and indeed submit extra to the relevant revenue agency.
“tax justice blog” Yep, we know all we need to know about you.
Are we trying to add conditions to the offshore cash repatriation, like each corporation must create X new positions for each billion repatriated within a certain timeframe?
Are college students hypothetically better off incorporating themselves to pay for school instead of getting college loans, classify their tuition as R&D, room and board as CapEx?
I completely agree – Apple will borrow money when it’s cheaper than paying tax. I love Apple products – but they are pretty ruthless about avoiding taxes when they can find a way not to pay taxes.
Exactly. Like most high-tech multi-nationals they sell in countries with special tax considerations or none. Then they complain that they have to pay “35%” to repatriate their money. I live overseas and am taxed in the U.S. on my earnings whether I keep them overseas or not. Why should a corporation be any different? Especially in this post-Citizens United world. Bullocks. Let Apple and every other big company pay its f*cking tax like everyone else has to. I’m so tired of the whining of repatriation.