An interesting stat regarding Apple, Microsoft and Google

[Lloydbm41]

We all know that US companies keep profits off shore so they don't have to pay the 35% corporate tax rate. What I didn't know was how much cash was kept in foreign banks and how much money these companies save.

Here are a few companies that are keeping more than $35 billion offshore as of their most recent filings:

Apple (AAPL, Tech30): $111.3 billion
General Electric (GE): $110 billion
Microsoft (MSFT, Tech30): $92.9 billion
Pfizer (PFE): $69 billion
Merck (MKGAF): $57.1 billion
IBM (IBM, Tech30): $52.3 billion
Johnson & Johnson (JNJ): $50.9 billion
Google (GOOG, Tech30): $38.9 billion

Google saves nearly $14 billion per year, Microsoft saves itself $27 billion a year and Apple saves nearly $40 billion from US taxes.

 

[MRU]

" You're welcome ".....

But yeah I think what folks also don't realise when they read reports of president Obama criticising Ireland, is that whilst Apple have European HQ here to make good on our corporate tax rate, the fact is that, that off shore money is not in our banks here either..... Other than their Irish work forces, the tax paid here is negligible.

If it was here in our banks, they would have all lost their money back in 2007 when every single bank when bankrupt and the Irish tax payer bailed out all our banks to the tune of billions and billions, creating a legacy debt to the Irish tax payer for two or three generations to come .....

 

[tbayrgs]

We all know that US companies keep profits off shore so they don't have to pay the 35% corporate tax rate. What I didn't know was how much cash was kept in foreign banks and how much money these companies save.

Here are a few companies that are keeping more than $35 billion offshore as of their most recent filings:

Apple (AAPL, Tech30): $111.3 billion
General Electric (GE): $110 billion
Microsoft (MSFT, Tech30): $92.9 billion
Pfizer (PFE): $69 billion
Merck (MKGAF): $57.1 billion
IBM (IBM, Tech30): $52.3 billion
Johnson & Johnson (JNJ): $50.9 billion
Google (GOOG, Tech30): $38.9 billion

Google saves nearly $14 billion per year, Microsoft saves itself $27 billion a year and Apple saves nearly $40 billion from US taxes.

You didn't include a source for these stats so I couldn't quickly verify but I don't think you're exactly correct. I'm guessing these are offshore cash holdings, not annual profits. Corporations are not subjected to a corporate tax on their cash holdings, but rather would have to pay tax on income generated by those reserves (i.e. interest). That would be like having to pay income tax every year on the money held in your savings acount. So for examply if Apple was able to generate a 10% return on these reserves, that $11 billion would be subject to the 35% tax rate you stated if the funds were in the US, or roughly $4 billion.

Yes, these corporations are still saving substantion amounts of money by keeping their cash (from profits) offshore, just not to the astronomical heights you stated.

 

[bobenhaus]

We all know that US companies keep profits off shore so they don't have to pay the 35% corporate tax rate. What I didn't know was how much cash was kept in foreign banks and how much money these companies save.

Here are a few companies that are keeping more than $35 billion offshore as of their most recent filings:

Apple (AAPL, Tech30): $111.3 billion
General Electric (GE): $110 billion
Microsoft (MSFT, Tech30): $92.9 billion
Pfizer (PFE): $69 billion
Merck (MKGAF): $57.1 billion
IBM (IBM, Tech30): $52.3 billion
Johnson & Johnson (JNJ): $50.9 billion
Google (GOOG, Tech30): $38.9 billion

Google saves nearly $14 billion per year, Microsoft saves itself $27 billion a year and Apple saves nearly $40 billion from US taxes.

Yeah sounds like they are smart companies and you would probably do the same thing if you owned a company.

 

[lazard]

You didn't include a source for these stats so I couldn't quickly verify but I don't think you're exactly correct. I'm guessing these are offshore cash holdings, not annual profits. Corporations are not subjected to a corporate tax on their cash holdings, but rather would have to pay tax on income generated by those reserves (i.e. interest). That would be like having to pay income tax every year on the money held in your savings acount. So for examply if Apple was able to generate a 10% return on these reserves, that $11 billion would be subject to the 35% tax rate you stated if the funds were in the US, or roughly $4 billion.

Yes, these corporations are still saving substantion amounts of money by keeping their cash (from profits) offshore, just not to the astronomical heights you stated.

Nothing gets taxed until Apple decides to repatriate the cash (which will never happen). And yes, the savings is astronomical, especially when Apple funnels 70% of their total profits overseas.

tax experts say that strategies like the Double Irish help explain how Apple has managed to keep its international taxes to 3.2 percent of foreign profits last year, to 2.2 percent in 2010, and in the single digits for the last half-decade, according to the company’s corporate filings.

 

[tbayrgs]

Nothing gets taxed until Apple decides to repatriate the cash (which will never happen). And yes, the savings is astronomical, especially when Apple funnels 70% of their total profits overseas.

Sure, they're avoiding the initial tax hit on the profit but they're not subjected to the corporate tax rate on that same cash annually as the OP stated. They might have saved $30+ billion in taxes on that $100+ billion but they wouldn't have to pay it every year either.

 

[Belmont31R]

Thats because the US is the only Western nation that think's they're entitled to tax money overseas. Doesn't just apply to corporations. Ex-pats, gov employees overseas, ect.



Should be done away with along with a general lowering of the corporate tax rate.

 

[jrswizzle]

We all know that US companies keep profits off shore so they don't have to pay the 35% corporate tax rate. What I didn't know was how much cash was kept in foreign banks and how much money these companies save.

Here are a few companies that are keeping more than $35 billion offshore as of their most recent filings:

Apple (AAPL, Tech30): $111.3 billion
General Electric (GE): $110 billion
Microsoft (MSFT, Tech30): $92.9 billion
Pfizer (PFE): $69 billion
Merck (MKGAF): $57.1 billion
IBM (IBM, Tech30): $52.3 billion
Johnson & Johnson (JNJ): $50.9 billion
Google (GOOG, Tech30): $38.9 billion

Google saves nearly $14 billion per year, Microsoft saves itself $27 billion a year and Apple saves nearly $40 billion from US taxes.

That's what happens when you have the highest corporate tax rate in the world by far.....

 

[Oletros]

That's what happens when you have the highest corporate tax rate in the world by far.....

What is the corporate tax rate in USA?

 

[jrswizzle]

What is the corporate tax rate in USA?

http://www.forbes.com/pictures/fidj45hkdk/hey-mister-tax-man/

35%.....looks like Japan's is higher.

 

[Belmont31R]

http://www.forbes.com/pictures/fidj45hkdk/hey-mister-tax-man/

35%.....looks like Japan's is higher.

Theres more too it than that as US companies have to pay a portion of an employee's own Federal taxes such as a Social Security. I'm not sure how that works out world wide but the US is certainly up there. We also tax foreign earned income if its brought back into the US. I don't believe any other developed nation does that. A MNC can pay taxes where they operate overseas, and then be hit again if they bring the profits 'back home'.

 

[VFC]

These corporations are not paying US taxes but you can bet they expect the US government (funded by us ordinary citizens) to protect their US facilities and surrounding infrastructure from terrorist attacks, attacks from a country (e.g., Russia, China, N. Korea, Iran, etc), attacks on product exports along sea and air transportation routes, natural disasters, financial system meltdowns, and anything else that would harm their business.

 

[markyr17]

These corporations are not paying US taxes but you can bet they expect the US government (funded by us ordinary citizens) to protect their US facilities and surrounding infrastructure from terrorist attacks, attacks from a country (e.g., Russia, China, N. Korea, Iran, etc), attacks on product exports along sea and air transportation routes, natural disasters, financial system meltdowns, and anything else that would harm their business.

Yes.... They are paying US taxes

What are you on about??

The other thing I wanted to add is that Apple is not only an American company. Each country they operate in generally has their own company such as Apple UK.

Obviously 100b isn't all from overseas but just to put things into perspective, Apple is not all USA.

 

[Belmont31R]

These corporations are not paying US taxes but you can bet they expect the US government (funded by us ordinary citizens) to protect their US facilities and surrounding infrastructure from terrorist attacks, attacks from a country (e.g., Russia, China, N. Korea, Iran, etc), attacks on product exports along sea and air transportation routes, natural disasters, financial system meltdowns, and anything else that would harm their business.

Apple is one of the top 3 corporate US tax payers...

 

[ackmondual]

Yeah sounds like they are smart companies and you would probably do the same thing if you owned a company.

I wouldn't expect any different. What gets to me is when individuals are accused of taking 1.5 years of unemployment insurance rather than looking for jobs right away, or taking the first job that comes along (never mind that if you were a professional like a software engineer, lawyer, accountant, nurse, etc., that places like the NYC unemployment offices tell you that you should turn down offers for fast food or minimum wage since it affects things negatively, and that in general, you can't and shouldn't be living off such wages anyways), when this is perfectly legal. Apparently, when corporations find loopholes, it's being smart, but when an individual does it, it's considered "slimy".

 

[Robstevo]

I don't see a problem with Apple etc not paying the US govement taxes for stuff sold in another country. If find that completely silly.


Your asking them to pay tax twice pretty much. Which will surely cost jobs etc

 

[Michael Goff]

Real question.

When people talk about companies keeping money overseas to avoid taxes, are they saying companies are making money in the US and moving it overseas to prevent taxes? Or are we pretending they owe the US taxes for things sold outside of the US?

 

[macfacts]

These corporations are not paying US taxes but you can bet they expect the US government (funded by us ordinary citizens) to protect their US facilities and surrounding infrastructure from terrorist attacks, attacks from a country (e.g., Russia, China, N. Korea, Iran, etc), attacks on product exports along sea and air transportation routes, natural disasters, financial system meltdowns, and anything else that would harm their business.

They also expect the US courts to help protect their intellectual property as well.
[doublepost=1485569295][/doublepost]

Real question.

When people talk about companies keeping money overseas to avoid taxes, are they saying companies are making money in the US and moving it overseas to prevent taxes? Or are we pretending they owe the US taxes for things sold outside of the US?

They are talking about intercompany transactions (transfer pricing) these multinational companies do. Example: USA company patents tech that is invented in USA, then sells for cheap (this is so the tax on that transfer is low) to a offshore subsidiary. That subsidiary then gets to collect royalties from the products the main company makes/sells.

So with Apple, an iPhone sold in France has part of that money going to pay for those patents and goes to Ireland.

Ever heard of Double Irish Dutch Sandwich? That's what it is. So yeah the profit was made outside USA but it started with tech invented in USA. Super shady.

 

[Michael Goff]

They also expect the US courts to help protect their intellectual property as well.
[doublepost=1485569295][/doublepost]

They are talking about intercompany transactions (transfer pricing) these multinational companies do. Example: USA company patents tech that is invented in USA, then sells for cheap (this is so the tax on that transfer is low) to a offshore subsidiary. That subsidiary then gets to collect royalties from the products the main company makes/sells.

So with Apple, an iPhone sold in France has part of that money going to pay for those patents and goes to Ireland.

Ever heard of Double Irish Dutch Sandwich? That's what it is. So yeah the profit was made outside USA but it started with tech invented in USA. Super shady.

It doesn't matter where it was invented if the item sold is in France. The US is not entitled to tax profits made in other countries.

 

[macfacts]

It doesn't matter where it was invented if the item sold is in France. The US is not entitled to tax profits made in other countries.

Let's take your idea to the extreme. What if Apple closed all Apple stores in USA and had an online store in France. All Americans have to buy from France now (don't worry, Apple is giving free shipping). Now Apple doesn't have to pay Uncle Sam anything.

See how your idea of an American company "selling in France = taxed in France" is not good?

 

[Michael Goff]

Let's take your idea to the extreme. What if Apple closed all Apple stores in USA and had an online store in France. All Americans have to buy from France now (don't worry, Apple is giving free shipping). Now Apple doesn't have to pay Uncle Sam anything.

See how your idea of an American company "selling in France = taxed in France" is not good?

Are you really using an unreasonable extreme to say that an iPhone sold in France to a French person is the same as tax avoidance on sales to Americans? Really?

 

[v0lume4]

Wow. That is a lot of moolah.

I wish that we could make it easier for these companies to bring that cash back here. I'm all for taxes, but if I were in one of these corporations' shoes, here's no way in heck I'd bring my cash back here if the government was going to take 35% of it (is that the current rate for money brought back in?). Hopefully under this administration we can introduce some new legislation that will incentivize corporations to keep cash here.

Corporations need to pay taxes just like the rest of us. I believe in taxes. I just don't believe in unfair taxes. My folks run a small business and I cannot believe some of the taxes they have to pay on some years. Even with some accounting wizardry they still have to pay a LOT. However it's not for me say whether it's fair or unfair since I don't know is the actual numbers. I'm getting into the realm of I-dont-know-what-Im-talking-about so I'm going to stop there.

Ever heard of Double Irish Dutch Sandwich? That's what it is. So yeah the profit was made outside USA but it started with tech invented in USA. Super shady.

Your post blew my mind. Wowza.

 

[Michael Goff]

Wow. That is a lot of moolah.

I wish that we could make it easier for these companies to bring that cash back here. I'm all for taxes, but if I were in one of these corporations' shoes, here's no way in heck I'd bring my cash back here if the government was going to take 35% of it (is that the current rate for money brought back in?). Hopefully under this administration we can introduce some new legislation that will incentivize corporations to keep cash here.

Corporations need to pay taxes just like the rest of us. I believe in taxes. I just don't believe in unfair taxes. My folks run a small business and I cannot believe some of the taxes they have to pay on some years. Even with some accounting wizardry they still have to pay a LOT. However it's not for me say whether it's fair or unfair since I don't know is the actual numbers. I'm getting into the realm of I-dont-know-what-Im-talking-about so I'm going to stop there.


Your post blew my mind. Wowza.

I agree with that sentiment. Key words, though: keep it here. Some of the tax dodging accusations are not about money from the US being moved elsewhere. The argument is that a phone sold in France to a French person should be taxed in the US because Apple is an American company.

 

[macfacts]

Are you really using an unreasonable extreme to say that an iPhone sold in France to a French person is the same as tax avoidance on sales to Americans? Really?

The hypothetical I gave was extreme but not unreasonable. I could see Apple doing it because they just moved all their non American app/music/book online sales to Ireland.

http://www.billboard.com/articles/b...ving-international-itunes-business-to-ireland

 

[Michael Goff]

The hypothetical I gave was extreme but not unreasonable. I could see Apple doing it because they just moved all their non American app/music/book online sales to Ireland.

http://www.billboard.com/articles/b...ving-international-itunes-business-to-ireland

So you're still arguing a French sale should be taxed in America?