“Apple has faced mounting criticism in recent years for avoiding taxes in the US and Europe. Wednesday, it offered critics 38 billion replies,” Klint Finley writes for Wired. “More precisely, Apple said it would pay an estimated $38 billion in tax to bring back to the US some of the cash it has stashed overseas over the years. Apple says the payment would be the largest tax payment of its type in history. But it’s also a pretty good deal for the company.”

“Under the new tax plan, Apple and other companies must pay taxes on foreign profits parked overseas. Companies aren’t required to actually move those funds back to the US, but there’s little reason for Apple to keep its cash abroad once it’s paid the tax, says Edward Kleinbard of the University of Southern California Gould School of Law,” Finley writes. “Previously, the US allowed companies to defer paying taxes on foreign profits until those profits were repatriated. So many companies, including Apple, opted to leave foreign profits overseas. As a result, companies accumulated a total of around $2.8 trillion in overseas holdings, research firm Audit Analytics estimates.”

“Had Apple decided to bring all of its overseas cash back to the US last year, it would have paid a tax rate of 35 percent, about $88.3 billion, minus the taxes paid to foreign governments,” Finley writes. “Although Apple is getting off easy with a tax bill of ‘only’ $38 billion, Kleinbard thinks the company’s effective tax rate will be a bit higher in the future…”

Read more in the full article here.

MacDailyNews Take: The importance of the U.S. finally moving to a territorial system cannot be overstated.

SEE ALSO:
‘We want to help America,’ Apple CEO Tim Cook says of moving foreign money back to the U.S. – January 18, 2018
Apple to build new U.S. campus, pay record $38 billion repatriation tax – January 18, 2018
Apple gives employees $2,500 bonuses after President Trump signed the GOP’s Tax Cuts and Jobs Act – January 17, 2018
Looks like Apple is bringing nearly all of its $250 billion foreign cash back home to America – January 17, 2018
Apple plans to add $350 billion to U.S. economy and create over 20,000 new jobs over next 5 years, pay $38 billion in repatriated taxes, the largest ever made – January 17, 2018
Stock market optimism from pros reaches highest level in nearly 32 years – January 17, 2018
Apple expected to issue less debt in 2018 now that President Trump has signed the Tax Cuts and Jobs Act – January 16, 2018
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Apple makes Trump-friendly investment in Finisar – December 13, 2017
Apple is backing up iPhone X’s Face ID and AirPods with American jobs – December 13, 2017
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Corning shares boosted by Apple’s $200 million investment – May 15, 2017
Apple’s billion-dollar advanced manufacturing investment is a blueprint for U.S. job growth – May 4, 2017
Apple to invest $1 billion to promote manufacturing jobs in the U.S. – May 4, 2017
Apple’s top manufacturing partner to meet with U.S. President Trump today – April 27, 2017