Apple has announced it will pay $38 billion in taxes to the US federal government as it brings some of the cash from its overseas stockpile back into the USA.
Before anyone gets the idea that Apple has suddenly reconsidered its stance on paying as little tax as possible on its profits, the reason this cash is being repatriated is because it’s more financial advantageous for Apple to do so.
Thanks to President Donald Trump’s recent tax cuts for corporations and the super wealthy – passed by Congress last December – the cost to repatriate money is significantly lower than it was (it’s now 15%) and corporate tax stands at 21% (it used to be 35%).
Apple currently has around $250 billion sitting offshore and even though it still faces a hefty tax bill bringing some of that money back into the United States, it will still save tens of billions of dollars now, compared to what it would have had to pay in tax, had it repatriated the money in 2017.
Apple says that the money is going to be invested in its operations Stateside, promising the creation of around 20 000 new jobs, adding to its US staff of 84 000. It also says the investment in its US manufacturing operations will be raised from $1 billion to $5 billion.
“Apple is a success story that could only have happened in America, and we are proud to build on our long history of support for the US economy,” said Apple CEO Tim Cook. “We believe deeply in the power of American ingenuity, and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness. We have a deep sense of responsibility to give back to our country and the people who help make our success possible.”
It’s likely both Apple and its shareholders are rather happy by the new turn of events.