Apple, Capitalizing on New Tax Law, Plans to Bring Billions in Cash Back to U.S.
Posted January 17, 2018 3:23 p.m. EST
SAN FRANCISCO — Less than four weeks after President Donald Trump signed the most consequential tax legislation in three decades, the world’s most valuable public company — Apple — laid out how it planned to capitalize on the new rules.
The iPhone maker said on Wednesday that it planned a $350 billion contribution to the U.S. economy over the next five years, with some of its new investments coming from bringing back the vast majority of the $252 billion in cash that it has long held abroad.
A provision in the Republican tax plan that was passed last month allows a one-time repatriation of corporate cash held abroad. Apple has 94 percent of its total cash outside the United States.
For years, Apple had said it wouldn’t bring its foreign earnings back to the United States until there were changes in the corporate tax code, because such a move would be too costly.
But the new tax plan puts Apple at less of a disadvantage. The law sets a one-time repatriation tax of 15.5 percent for foreign cash, down from 35 percent under the older tax system. Under the new tax code, Apple would also have been taxed whether it brought the money back or not.
The company has big plans for the money. It said it would create more than 20,000 new jobs in the United States, up about 24 percent from about 84,000 employees in the country currently. It also said it would open a new campus in a location where it currently has no operations.
Apple also said it would invest more than $30 billion in capital expenditures, or spending on parts and the equipment required to produce them.
“We have a deep sense of responsibility to give back to our country and the people who help make our success possible,” Timothy D. Cook, Apple’s chief executive, said in a statement.
Apple said in its statement that it anticipated a repatriation tax payment of about $38 billion. The 15.5 percent repatriation tax rate implies Apple is bringing back about $245 billion. Technically, U.S. companies don’t have to bring the cash to the United States, though they are required to pay taxes on it.