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Apple says it will pay $38 billion in repatriation taxes on offshore profits

Apple says it will pay $38 billion in repatriation taxes on offshore profits
[Photo: Flickr user Dru Bloomfield]

Apple shed some light Wednesday on what it plans to do with the roughly $250 billion it’s had stashed in overseas accounts. Under the new tax code, Apple can now bring the money back home at a greatly reduced 15.5% tax rate. The old federal tax rate was 35%.

Here’s what the company says it’ll do with the money:

  • Pay about $38 billion of it to government in repatriation taxes.
  • Spend more than $30 billion to create U.S. 20,000 jobs over the next five years.
  • Open a new campus at a U.S. location that will be announced later.
  • Expand its Advanced Manufacturing Fund (announced last spring) from $1 billion to $5 billion.
  • Contribute $350 billion to the U.S. economy over the next five years.

Here’s how Apple gets to that big number: “Combining new investments and Apple’s current pace of spending with domestic suppliers and manufacturers—an estimated $55 billion for 2018—Apple’s direct contribution to the US economy will be more than $350 billion over the next five years, not including Apple’s ongoing tax payments, the tax revenues generated from employees’ wages and the sale of Apple products.”MS