Apple’s overseas money ‘useless’, says TUAW
A strange piece of reporting from TUAW, talking about Apple’s $54 billion that’s ‘trapped’ overseas, and which Apple doesn’t want to repatriate, because it doesn’t want to pay corporate taxes:
Meanwhile, as Apple’s foreign cash hoard grows, the money is effectively useless to Apple and its shareholders. They could build a stack of dollar bills 3400 miles tall, but can’t they can’t do much else with it for now. [sic]
And there was me thinking you could buy THINGS with MONEY in countries other than the USA. Man, what a total idiot I’ve been all these years.
Well, the “and its shareholders” bit is accurate: Apple can’t pay dividends out of its foreign bank accounts. May be partly why Apple continues to hold off on declaring dividends. Which is a shame, would be nice to get more than just capital appreciation out of owning AAPL!
Hahah. It’s amazing how egocentric my countrymen can be at times. Dumbfounded!
Apple are not alone in this. Google, Microsoft and others have contributed to the $800bn currently sitting in Dublin doing nothing under this little tax avoidance scheme.
I’ve written about this before – but basically to spend it, it has to come back to the US in order to be spent. If it comes back to the US in any way, shape or form, it is liable for the 35% tax. And they can’t spend all $54bn without having to answer some serious questions from shareholders.
This is why they are joining the lobby for the “one-off” hoiday which will allow all $800bn to head back to the US tax free. “One-off” because they had a similar “one-off” in the early 2000s. Of course, should this holiday be granted, this would reduce this overall tax rate for Google, Apple, Microsoft et al from 3.1% – 5% they are paying at the moment to probable minus numbers.
Isn’t Apple’s effective tax rate in the mid 20% range currently?