Apple to pay $38bn on foreign cash pile

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Business

Apple to pay $38bn on foreign cash pile

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Apple chief executive Tim Cook at the iPhone X launch in November

Apple will pay about $38bn in tax on the $250bn cash pile it holds outside the US following recent changes to American tax rules.The sum is expected to be the biggest payment under the reforms, which slash the US corporate tax rate.The tech giant also plans to to build a new campus and create 20,000 new jobs in the US.Apple said its plans would contribute more than $350bn to the US economy over the next five years.The company has not said how much, if any, of its cash abroad would be brought back to the US.Chief executive Tim Cook said Apple is “focusing our investments in areas where we can have a direct impact on job creation”.The company employs about 84,000 people in the US and expects to spend $55bn with domestic suppliers and manufacturers this year. The location of Apple’s new campus, which will house technical support staff, will be announced later this year. The firm also plans $30bn in capital investments, including more than $10bn in data centres over five years.It has data centres in seven states and on Wednesday broke ground on an expansion of its operations in Reno, Nevada.Tax changesApple is the latest company to promote plans to invest in America following the overhaul of the US tax code.The changes cut the corporate rate from 35% to 21%. They also stopped applying that rate to profits that companies make overseas, in exchange for a one-off tax payment.President Donald Trump said the cuts would make the US more competitive and spur domestic companies to invest at home.House Speaker Paul Ryan, a Republican congressman who spearheaded the tax overhaul, celebrated Apple’s announcement in a post on Twitter. “This is great news for the American economy and for America’s workers,” he said.

Skip Twitter post by @SpeakerRyan

This is great news for the American economy and for America’s workers. https://t.co/v7obxUbbYW— Paul Ryan (@SpeakerRyan) January 17, 2018

End of Twitter post by @SpeakerRyan

Apple, which has been criticised for its large overseas cash holdings, had previously called for simplification of US tax rules.The company’s moves come as tech firms face scrutiny from competition regulators for their dominance, as well as calls to make devices less addictive.Apple is also facing legal action over its deliberate slowing of older iPhones.

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