Apple looks forward to wiping $47bn off its overseas profit tax bill – thanks to US shakeup
A percentage reduction AND no future tax on foreign profits? Too kind, Uncle Sam!
While Apple may have to fork out €13bn (£11.4bn) to the Irish government in back taxes, on the other side of the Pond it could gain $47.2bn (£35.2bn) in tax breaks.
The US Senate and House are working on shaking up America's tax rules, mostly giving the super-rich tax breaks while giving poor people a rough deal. The draft legislation, being pushed through by the Republicans and championed by President Donald Trump, includes slashing the levy on companies' overseas earnings from 35 per cent to just 14 per cent.
The break could make Apple one of the biggest beneficiaries of the controversial legislation, according to a Financial Times' analysis.
Essentially this means if the firm decided to bring all its overseas profits back home to America after the proposed cuts came into force, the iPhone giant would pay less than half the overseas tax it is currently liable for.
As well as enjoying this drastically cut rate, future overseas profit wouldn't be taxed again in the US, meaning the fruity biz would gain further benefits should the US Senate and House bills pass in their current form.
Since there is negotiation and more voting still to come, and a whole host of other measures in the bill to consider, it might be some time before Apple would repatriate their international dough: for now, it will just have to rest in the vault until legislators make up their minds
It follows news on Monday that Apple agreed to pay €13bn (£11.5bn) in unpaid taxes in Ireland on the order of the EU.
In August last year the European Commission ruled that Ireland's tax benefits to Apple were illegal under EU state aid rules because they allowed the giant to pay substantially less tax than other companies.
European regulators had threatened to take Ireland to the court in October over its failure to collect the tax. ®