Apple to pay $38 billion in US taxes on overseas cash

Enlarge (credit: Getty Images | Gary Waters)

Apple announced on Wednesday that it would pay $38 billion in taxes to the federal government as it brings cash earned overseas into the United States. The big payment is the result of President Donald Trump's tax cut bill, passed last month, which created a new, special tax rate for overseas cash.

Apple is likely to be the biggest beneficiary of that provision. The American company had around $250 billion in cash and other short-term assets held by overseas affiliates. Under previous tax law, Apple would have had to pay a tax of 35 percent in order to bring overseas cash back to the United States. Under the new law, that rate is cut to 15.5 percent, saving Apple tens of billions of dollars compared to what it would have paid to bring the cash home in 2017.

Apple didn't have a choice about this. Under the new tax bill, all overseas cash is subject to a one-time 15.5 percent tax whether Apple leaves it overseas or moves it to the United States.

Read 3 remaining paragraphs | Comments