If Apple didn’t hold $181B overseas, it would owe $59B in US taxes(arstechnica.com)
arstechnica.com
If Apple didn’t hold $181B overseas, it would owe $59B in US taxes
http://arstechnica.com/business/2015/10/apple-google-microsoft-hold-more-than-336b-overseas-via-legal-tax-loopholes/
2 comments
I'm curious what others think about it. Should corporations be tax exempted just because they hold a lot of money? For me it sound like a vicious circle, we give you more power, because you have a lot of power.
They aren't tax exempt because they hold a lot of money. Their earnings overseas are tax exempt when a subsidiary they create in that foreign land collects the income from licenses granted to it by the US company. This means the money never enters the US banking/taxing/regulation markets. So while people might disagree or be critical of the companies doing it, from what is understood it is legal and good business for them to do this.
The flip side to this, if the governments where these subsidiaries are run from decide to change their tax laws they could tax that money and make it very painful for US corporations. But as you can imagine large businesses doing this have substantial influence on those governments, just as they do here in the US.
Also, there has been open discussions between the US government and some of these companies (but doubtful it would ever happen) to allow companies to repatriate overseas funds for a lower one time tax on those funds. Thereby at least collecting some taxes but also allowing that money back in the US to help create jobs here etc. The companies have no need to do this mind you, but at least a couple have said they would be open to it. But in the end (and in simple terms) if a US company wants to use the money they have overseas in the US without repatriating it, they loan it to themselves from their overseas holdings.
The flip side to this, if the governments where these subsidiaries are run from decide to change their tax laws they could tax that money and make it very painful for US corporations. But as you can imagine large businesses doing this have substantial influence on those governments, just as they do here in the US.
Also, there has been open discussions between the US government and some of these companies (but doubtful it would ever happen) to allow companies to repatriate overseas funds for a lower one time tax on those funds. Thereby at least collecting some taxes but also allowing that money back in the US to help create jobs here etc. The companies have no need to do this mind you, but at least a couple have said they would be open to it. But in the end (and in simple terms) if a US company wants to use the money they have overseas in the US without repatriating it, they loan it to themselves from their overseas holdings.
Thanks for posting, Im joining Citizens for Tax Justice, FYI: "Citizens for Tax Justice (CTJ) is a 501(c)(4) organization. A contribution to CTJ is not tax-deductible"