Apple’s CEO Tim Cook has announced that Apple will be paying $38 billion in taxes to bring home profits it had been keeping overseas. The impetus for the repatriation is the favorable treatment created by the recent passage of tax reform. Along with the boon for nation’s budget, Apple will be investing $30 billion in capital in the U.S. over the next five years, including the creation of a new campus. In all the spending will create as many as 20,000 jobs.
The repatriation reform is long overdue. Tripp Mickle reports:
The total includes a new campus, which initially will house technical support for customers, and $10 billion toward data centers across the country. It also will expand from $1 billion to $5 billion a fund it established last year for investing in advanced manufacturing in the U.S.
Apple’s $38 billion tax commitment is the largest such sum announced in response to the major overhaul of the U.S. tax code that President Donald Trump signed into law late last year. That law included an incentive for U.S. companies to bring home offshore holdings, with companies required to pay a one-time tax of 15.5% on overseas profits held in cash and other liquid assets.
U.S. companies have long pushed for such a change to enable them to repatriate overseas cash without what they considered an excessive tax hit. Apple on Wednesday cited the tax changes as the reason for its $38 billion payment. It didn’t say how much of its $252.3 billion in overseas cash holdings it plans to bring home, though it will be the vast majority, Chief Executive Tim Cook told ABC News in an interview.
Read more here.