Due to high taxes, Apple plans to continue holding its cash overseas, company says
Apple will in the next three years spend around $45 billion as part of a program launched on Monday that will see shareholders get the first dividend since 1995.
However, that money will not come from the $64 billion held by the company in foreign countries. This is because the government charges a very high tax rate for repatriating money.
Peter Oppenheimer told analysts and investors during the Monday conference that the company does not want to incur the cost of repatriating foreign cash at the moment.
Apple together with other tech giants like Microsoft and Google hold more than $1 trillion in foreign countries are pushing for a tax holiday.
There have been heated debates on the hill regarding the issue. Kevin Brady, a Republican from Texas is the main sponsor of a bill which has 109 co-sponsors. Critics say that giving tax breaks to companies with overseas operations is like rewarding the rich for not paying their taxes.
Initially, the Obama administration supported the proposal. However, his tax reform blueprint launched last month is totally against the idea.
While Apple does not usually discuss such matters in public, Monday’s conference was specifically meant to get the message across to Congress.
Oppenheimer claimed that corporate tax of 35 percent paid by companies when bringing foreign earnings home was an economic disincentive.
Oppenheimer further said that the company has already expressed its view to the Obama administration and Congress.
- Unusual Tax Deductions Can Be Risky (2011taxes.org)