Apple Capitalizes on New 2018 Tax Law
Apple, which had long deferred paying taxes on its foreign earnings, unveiled plans on Wednesday that would bring back the vast majority of the $252 billion in cash that it held abroad and said it would make a sizable investment in the United States.
With the moves, Apple will take advantage of the new tax code signed into law last month. A provision allows for a one-time repatriation of corporate cash held abroad at a lower tax rate than what would have been paid under the previous tax plan. Apple, which has 94 percent of its total cash of $269 billion outside the U.S., said it would make a one-time tax payment of $38 billion on the repatriated cash.
Apple is one of several multinational giants that have kept a total of roughly $3 trillion in global profits off their domestic books to sidestep the previous 35 percent federal corporate tax rate. Under the new tax law, companies that make a one-time repatriation of cash will be taxed at a rate of 15.5 percent on cash holdings and 8 percent on nonliquid assets. That is lower than the new 21 percent corporate rate. Under the new tax code, Apple would also have been taxed whether it brought the money back or not.
By shifting the money under the new terms, Apple will save approximately $43 billion in taxes, more than any other American company, according to the Institute on Taxation and Economic Policy, a research group in Washington.
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