Business

Wednesday 25 April 2018

Apple to pay €31bn tax bill as it brings cash home to US

Stock picture
Stock picture

Stephen Nellis

Apple will pay a €31bn tax bill as it repatriates overseas cash to the US, most of it once held by Irish subsidiaries.

The bill will be the largest of its kind as the tech giant also pledged to open a new campus as part of a five-year US investment plan.

Apple confirmed it will make about €31bn in one-time tax payments on its overseas cash.

It is one of the largest corporate spending plans announced since the passage of a tax cut signed by US President Donald Trump.

This cut the country's main corporate rate from 35pc to 21pc.

Bloomberg reports that an undisclosed number of employees in Cork look set to get a stock windfall worth over €2,000 each after Apple repatriates the tax.

Apple employs around 6,000 people in Ireland from its Cork campus.

The bonus will come in the form of restricted stock units and will benefit "most employees worldwide in the coming months", according to the sources.

The company has been under increasing pressure to make US investments since the 2016 presidential campaign, when Mr Trump targeted the iPhone maker for making products in Asian factories.

Apple has announced no plans to change that practice and experts say it would be economically impractical to make iPhones in the United States.

However, the company has begun to emphasise its US economic impact, from developers who sell software on its App Store to the tens of billions of dollars it spends each year with US suppliers.

Between the spending plan, hiring 20,000 staff, tax payments and business with Stateside suppliers, Apple estimated it would spend around €287bn in the US over the next five years.

It did not, however, say how much of the plan was new or how much of its €206bn in cash abroad - the largest of any US corporation - it would bring to the United States.

In addition to the €31bn in taxes it must pay, Apple has run up €80bn in US-issued debt to pay for previous share buybacks and dividends.

Some investors said Apple's American investments would give the company room to make more stock buybacks or pay dividends without criticism.

Apple shares rose 1.7pc for the day.

Irish Independent

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