Citizens for Tax Justice: Apple Holds Billions of Dollars in Foreign Tax Havens

[marmar]

Apple Holds Billions of Dollars in Foreign Tax Havens
May 20, 2013 11:53 AM


Virtually None of Its $102 Billion Offshore Stash Has Been Taxed By Any Government

An analysis of Apple Inc.’s financial reports makes clear that Apple has paid almost no income taxes to any country on its $102 billion in offshore cash holdings. That means that this cash hoard reflects profits that were shifted, on paper, out of countries where the profits were actually earned into foreign tax havens.

How We Know Apple’s Offshore Cash is Largely in Tax Havens

Under current law, corporations can indefinitely defer paying U.S. income taxes on their offshoreprofits. Multinational corporations with offshore profits sometimes disclose in their financial reports the amount of tax they would pay if there were no “deferral” and their offshore profits were taxable in the United States. But this potential tax rarely amounts to the full 35 percent U.S. corporate tax rate, since these companies typically have already paid some foreign income taxes on these foreign profits when they were earned. Companies are allowed a “foreign tax credit” against their U.S. tax when and if the profits are subject to U.S. tax. So a company that has already paid (for example) a 25 percent tax rate on its unrepatriated offshore income would only pay the difference between that amount and the U.S. corporate tax rate of 35 percent (in this example, 10 percent) when that income is repatriated to the U.S.



The data in Apple’s latest annual report show that the company would pay almost the full 35 percent U.S. tax rate on its offshore income if repatriated. That means that virtually no tax has been paid on those profits to any government.

At the end of March 2013, Apple’s foreign subsidiaries had accumulated $102.3 billion in cash, cash equivalents and marketable securities. Based on more complete information provided in Apple’s latest full annual report, without “deferral” Apple would owe $35 billion in U.S. income taxes on this cash hoard. .................(more)

The complete piece is at: http://ctj.org/ctjreports/2013/05/apple_holds_billions_of_dollars_in_foreign_tax_havens.php#.UZzdqzcrTTq

[badtoworse]

1. We need to be realistic and fix our tax code

If we don't, Apple's money is going to stay offshore and more companies will adopt Apple's model. Apple is not going to cut us a $35 billion dollar check not matter how much we whine.