> In order to pay dividends and not pay taxes, Apple has actually gone the route of borrowing money. So, they borrow money in the US and pay a low interest rate while their cash sits overseas.
Wow really. That's clever but also weird. Don't they sustain themselves US being largest market?
> Apple has a whole bunch of money sitting overseas that it has not paid taxes on.
To clarify: they haven't paid US taxes on it. They've paid whatever taxes are levied by the foreign countries they're operating in, but the US also double-taxes that same money if it's brought back into the US.
I may be wrong but my understanding is US taxes the difference between foreign and domestic tax rates.
Re:Apple's cash hoard swells to $246B
by DanielBMarkham on Sunday April 16, 2017 @08:30AM
(#14125546)
Also once they pay tax (again) on it to get it into the U.S., it gets taxed a third time if they distribute it to the shareholders.
Dividends are post-tax and have to be brought back to the US before they are paid out. Apple has a whole bunch of money sitting overseas that it has not paid taxes on. So, if Apple brings it back to pay to shareholders as a dividend, 40% goes to the US government and 60% to shareholders.
Let's say Trump tells Apple (and other companies) they can bring the money back with a 10% tax. Now, the shareholders get 90% of the money as a dividend, which is 1.5X the 60%.
In order to pay dividends and not pay taxes, Apple has actually gone the route of borrowing money. So, they borrow money in the US and pay a low interest rate while their cash sits overseas.