“Apple’s cash hoard is roaring, especially overseas. According to a recent report, Apple has $74 billion in overseas cash, up from $64 billion just 7 months ago and $35 billion in 2010,” Calpurnia writes for Seeking Alpha. “And Apple is not the only one. Other companies are continuing to build large piles of cash overseas. Microsoft has $50 billion, Cisco $42.3 billion, Oracle $25.1 billion, and Qualcomm $16.5 billion.”
“These hoards represent a showdown between the large multinational corporations and the government over taxes,” Calpurnia writes. “US tax law requires that earnings of domestic corporations to be taxed domestically, even if those earnings are earned outside the US. Currently, the law ‘allows them to defer taxes on their profits from international operations until they bring the cash back to the U.S.,’ writes Justin Fox in a in his analysis of tax implications of overseas corporate cash hoards.”
Calpurnia writes, “Apple is pushing for a change in policy. In a recent earnings conference call, Apple CFO Peter Oppenheimer states: ‘Repatriating the cash from offshore would result in significant tax consequences under current U.S. law. We have expressed our views with Congress and the administration. We think that the current tax laws provide a considerable economic disincentive to U.S. companies that might otherwise repatriate the substantial amount of foreign cash that they have. And that’s our view, and we’ve expressed it.’ …Don’t expect Apple to give up any time soon. With this being an election year, it could pay for Apple to wait for a change in policy.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Carl H.” for the heads up.]
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