Apple holding $181 billion in profit offshore, study says

With $181 billion stashed overseas, Apple tops the list of U.S. companies that hold the most offshore profit, according to a new study released Tuesday.

Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund used the companies’ SEC filings in the study, which found that Fortune 500 companies held more than $2.1 trillion in profit overseas in 2014.

Apple would have to pay more than $59 billion in taxes if the company tried to bring its $181 billion back to the United States, according to the study, which also noted that the Cupertino tech giant has three tax-haven subsidiaries overseas.

Apple reported in July that it had $203 billion in cash, the first time it broke the $200 billion mark.

In 2013, Apple CEO Tim Cook testified at a Senate hearing about his company’s tax avoidance. (Troy Wolverton wrote at the time about the accusations the company was facing regarding its tax practices. Apple was said to have $102 billion in overseas cash at the time.)

Cook said then that Apple complies with all laws and pays “every single dollar” it owes. He touted the many jobs the company has created and the taxes it has paid, saying that as far as he knew at the time, Apple was the biggest taxpayer in America. He also said Apple holds a lot of cash overseas because of its global growth, and to fund its international operations. And he called for simplifying U.S. corporate tax laws and lowering corporate taxes, such as the 35 percent tax to repatriate overseas profit.

We’ve contacted Apple for comment about this week’s study.

The study put GE at No. 2 on the list, with $119 billion held offshore. Some other tech companies on the list:

  • Microsoft, $108 billion
  • IBM, $61 billion
  • Cisco Systems, $53 billion
  • Google, $47 billion
  • Hewlett-Packard, $43 billion
  • Oracle, $38 billion
  • Intel, $23 billion

 

Photo: An Apple store in central Beijing, China, in 2013. (Alexander F. Yuan/Associated Press)

 

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  • WAM

    AAPL is dead just look at the stock – HORRIBLE!

    • USMC 8th and I

      Guessed you missed the run when Apple dropped to $385…ran up, then split and ran up again……..either that…..or you’re short the stock.
      Got news for you……Apple ain’t dead. It hasn’t even begun to run…

      • WAM

        Yeah I was in on that – I am just trying to match my enthusiasm vice the plummet vice the dis-information of good news everywhere AAPL exists

  • I’d whine and complain, but it’s the Republicans who’ve created the cush laws that allow companies to do this, LEGALLY.

    It’s all about business, right? Even the SCOTUS agrees, what with their dumb Citizens United ruling. The loopholes that would prevent this from occurring LEGALLY remain there due to Republicans, the lobbyist arm of corporations in Congress.

    And trickle-down economics works so well, as history has shown. Note that not a single Republican has come forth to denounce Apple and other companies for adhering to what is plainly LEGAL.

    Imagine if you or I tried to hide $10 offshore? We’d be treated like a black person with 0.001 grams of weed on their person, and shipped off to Riker’s Island and throw in the SHU.

    • Mike Smith

      You are correct to place the blame with the legislature rather than the taxpayer companies.

      However, the Democrats are equally complicit when it comes to corporate welfare and handouts. Heck, it wasn’t very long ago that they controlled the White House AND both Houses. It would have been easy to fix then, if they wanted to.

      Or do you think maybe the problem stems from all of those hardcore Republicans on Apple’s Board of Directors? Tim Cook, Al Gore et al.

  • Slydog23

    So the point of this article is that Apple has multi-billions offshore and that’s bad because they didn’t pay taxes on sales that were not made in America, yet this current dysfunctional government should be entitled to a significant portion of those sales. Ridiculous!

    • althink

      In the case of Apple, your assumption about country profits being proportional to sales is wrong.

      Apple’s strongest market is the U.S. but Apple is able to avoid U.S. taxes on U.S. sales by exporting profits from U.S. sales by first “selling” U.S. developed IP (patents) to off-shore tax haven subsidiaries at a “transfer price” and then assigning royalty to the exported IP. The royalty is recorded as tax-haven income and a U.S. expense thereby decreasing U.S. profits.

      IP accounting has been described as the world’s biggest tax shelter. My understanding is that this method of transfer pricing (and profits) is most common in tech companies and pharmaceuticals. The rules are in the IRS code so it is unclear whether they were created by a friendly IRS bureaucracy, friendly courts, or directly by lawmakers.

      • Don Smith

        Sounds like Apple is doing a smart thing within the law….what’s ridiculous is a 36% corporate tax rate

  • USMC 8th and I

    Give the corporations a “tax holiday” and they’ll bring the dollars back to the USA……..Carson has already made the suggestion and it makes sense.

  • Don Smith

    Slow news day???
    Very old news…and who cares?…despite keeping money overseas, Apple still pays the most corporate tax of any company….the real issue here?….36%….36% is too high for corporations to pay in taxes, it’s even too high for individuals
    Want to get more tax revenue?…give a 12% tax amnesty…then lower corporate tax rate to 18%…incentivize corp to keep money here, because if it was any of us that ran those companies,…we’d be doing the same thing
    36% is ridiculous

    • slayerming1 .

      Hello
      Really late post, but just curious where do you get your information from? Just want to be more up to date with all this I suppose.

 
 
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