“That drawn-out schedule puts the biggest bills off until later years, meaning Apple’s first repatriation payment would probably be much closer to $3 billion, according to tax experts,” Browning reports. “U.S. multinationals are estimated to have $3.1 trillion in total untaxed overseas earnings, held as both cash and illiquid assets. Apple has the largest offshore cash pile, with about $252 billion as of the end of September, the most recent tally available.”
“In passing the most extensive tax-code rewrite since 1986 — a bill that cut the corporate tax rate to 21 percent from 35 percent — Congress scrapped the previous international tax system for corporations. The old system included an unusual provision that allowed companies to defer U.S. income taxes on foreign earnings until they returned the income to the U.S. That ‘deferral’ provision led companies to shift earnings overseas and stockpile profits in low- and no-tax havens,” Browning reports. “Going forward under the new tax system, companies will generally only be taxed on their domestic profits, not dividends from their foreign subsidiaries — though the bill included safety nets intended to capture certain foreign income and payments pegged to subsidiaries in low-tax countries like Ireland and no-tax countries like Bermuda.”
Read more in the full article here.
MacDailyNews Take: According to the Tax Cuts and Jobs Act, Apple’s $38 billion tax bill can be paid as follows: 8% in 2018-2022, 15% in 2023, 20% in 2024, and 25% in 2025.
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