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Apple's $74B overseas cash hoard leads all U.S. tech companies

post #1 of 51
Thread Starter 
A report released on Monday from investment bank Moody's revealed that Apple leads a list of technology U.S. companies holding overseas cash with some $74 billion, up from $64 billion in December and $35 billion at the end of 2010.

In a note released to investors, Moody?s Investors Service?s Richard Lane cited SEC filings as well as his firm's estimates and said U.S. tech companies contributed $227.5 billion to a total of $457 billion in overseas cash held by American corporations at the end of the first quarter of 2012, reports Barron's.

Excluding Apple's $74 billion contribution overseas cash rose saw a year-to-year increase of 15 percent for the March quarter, but when the Cupertino-based company's assets are included that number jumps to 31 percent.

Following Apple was Microsoft with $50 billion in overseas cash and Cisco with $42.3 billion. Oracle and Qualcomm rounded out the top five with $25.1 billion and $16.5 billion, respectively. The top ten U.S. tech companies now own 83 percent of all offshore cash for the sector, up from 74 percent five years ago.

Only companies holding combined cash and liquid assets above $2 billion were taken into account as part of the report.

Cork
Apple's European headquarters in Cork, Ireland.


Apple's international business recently came under fire for avoiding U.K. taxes by operating out of its headquarters in Cork, Ireland as well as an offshoot in the Virgin Islands.
post #2 of 51

It's "hoard" -- don't trust these spoilhecklers. JLG

post #3 of 51

Well spotted. I was an admirer of BeOS at the time, I guess you could say it was the first time I saw a truly modern operating system, and kind of got a feeling about what the future would hold.

 

The reason I felt compelled to comment is because I used to walk past that building in the photo every day to work at Apple at 7am in the morning. Enjoyed my time there and met a lot of great people. Now I run my own company.

post #4 of 51

In case anyone is wondering, here's what the area looks like (photo below). It's quite run down with a lot of social problems in some ways.

 

IMG_0043.JPG

post #5 of 51

Here's the view over the parking lot from the main employee cafeteria. It's a view to kill for! For obvious reasons I cannot post any photos from inside the building.

 

IMG_0212.JPG

post #6 of 51

That's the real reason Apple built all those data centres:

 

To store all those zeroes in their electronic bank accounts!

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post #7 of 51

G and not B.

ISO standards here people.

Mega

Giga

Tera

etc.

 

So, $74G.

post #8 of 51
Quote:
Originally Posted by davebarnes View Post

G and not B.
ISO standards here people.
Mega
Giga
Tera
etc.

So, $74G.

Or just B, as we know that means billion.

Whenever I see $__MM, I always think trillion because two m's makes no sense.

Originally posted by Marvin

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Originally posted by Marvin

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post #9 of 51
Quote:
Originally Posted by Tallest Skil View Post

Or just B, as we know that means billion.
Whenever I see $__MM, I always think trillion because two m's makes no sense.

It's even more confusing because in some financial books, 'M' means thousand, so 'MM' means million.
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post #10 of 51

Also, what's up with this?

 

cork-120420.jpg

 

Are they employing education on the side of the road now?

 

Tell me things haven't gotten that bad!

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post #11 of 51
Quote:
Originally Posted by GTR View Post

Also, what's up with this?

Are they employing education on the side of the road now?

Tell me things haven't gotten that bad!

And to top it all off, the sign still uses Garamond (though the image may be dated).

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

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post #12 of 51
Quote:
Originally Posted by Tallest Skil View Post

And to top it all off, the sign still uses Garamond (though the image may be dated).

Garamond 20% squished if I recall correctly.
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post #13 of 51
Quote:
Originally Posted by digitalclips View Post


Garamond 20% squished if I recall correctly.

 

I think it's ITC Garamond, though Apple had a specially-commissoned version called Apple Garamond, if I recall. 

 

It's anything but a "Garamond" font. But there you have it. Whatever its design roots, I've always liked it in connection with Apple. 

post #14 of 51
Quote:
Originally Posted by Quadra 610 View Post

I think it's ITC Garamond, though Apple had a specially-commissoned version called Apple Garamond, if I recall. 

It's anything but a "Garamond" font. But there you have it. Whatever its design roots, I've always liked it in connection with Apple. 

Yep that's what was referring to, the commissioned font was Garamond 20% narrower I think and the cost of the new look was 1M$ I seem to remember and that included contrasting Helvetica Black .... Very classy.
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post #15 of 51

I wish I could keep all my cash overseas and avoid paying taxes...all the while doing business here in the U.S.

post #16 of 51
Quote:
Originally Posted by lamewing View Post

I wish I could keep all my cash overseas and avoid paying taxes...all the while doing business here in the U.S.

They aren't keeping all their cash overseas. Cash in other countries was earned in other countries. They're also paying taxes as those countries require. The only thing they aren't doing is bringing that cash back earned outside the US back to the US when they don't need to.

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post #17 of 51
Quote:
Originally Posted by lamewing View Post

I wish I could keep all my cash overseas and avoid paying taxes...all the while doing business here in the U.S.

 

Surprisingly, there's nothing to stop you from also being the next Apple, starting up an international, multi-billion dollar company, and doing the exact same thing!

 

Go for it!

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post #18 of 51

Now we know why they don't need to participate in any green program in the US.

post #19 of 51
Quote:
Originally Posted by AdamC View Post

Now we know why they don't need to participate in any green program in the US.

Hello?

post #20 of 51
I honestly believe that these companies should be allowed to bring the money in to the United States, tax free, if it is for capital expenditures- like factories, buildings, stuff like that. Can someone tell me why this would be bad? I'm not asking in a challenging or a baiting way- I'm dead serious- I want to hear a well-reasoned argument as to why that would be bad. I haven't given too much thought to it- my reaction was more of a knee-jerk one.
post #21 of 51
Quote:
Originally Posted by AdamC View Post

Now we know why they don't need to participate in any green program in the US.

 

Green as in dollar I hope you mean in there...
post #22 of 51
Quote:

Apple's international business recently came under fire for avoiding U.K. taxes by operating out of its headquarters in Cork, Ireland as well as an offshoot in the Virgin Islands.

Apple is doing NOTHING illegal, nor it is breaking any laws.  As a shareholder, I expect Apple to do whatever it can to maximize my shareholder value.  As a tax-paying citizen, I will pay the absolute minimal amount of taxes that my government, or the government where my money was earned, has LEGALLY authorized me to do so.

Don't like the rules, petition your government to change them.  Apple is no different than the gazillion other companies doing the EXACT same thing.

post #23 of 51

Individual citizens of the USA who work overseas must pay income tax on any money they earn while abroad. It isn't fair at all.

 

Any technique to avoid paying taxes that is legal should be utilized by individuals and corporations. Some regulations are just stupid and unfair and should be repealed.

 

My preferences for a tax system are the FairTax.org approach, which doesn't tax any income of businesses or individuals. Sales taxes are the sole way to gather revenue within the nation. The better one, supported by the Libertarian Party, incorporates the no taxation on citizens and corporations and only gathers money from tariffs on imported goods. Both of these methods would encourage manufacturing jobs within the USA.

 

I still think it is funny that Apple has more cash than the US government and is worth more than some nations.
 

post #24 of 51
Quote:
Originally Posted by iansilv View Post

I honestly believe that these companies should be allowed to bring the money in to the United States, tax free, if it is for capital expenditures- like factories, buildings, stuff like that. Can someone tell me why this would be bad? I'm not asking in a challenging or a baiting way- I'm dead serious- I want to hear a well-reasoned argument as to why that would be bad. I haven't given too much thought to it- my reaction was more of a knee-jerk one.

Why should U.S. headquartered corporations be permitted to hold the profits from their, wholly-owned, foreign subsidiaries in offshore accounts? I'd point out that the U.S. gave these companies the infrastructure, educated workforce, and the legal framework necessary for these companies to have achieved the successes that they have, and (obviously, from the subject of this thread) continue to enjoy. If some other nation would serve the needs of the Microsofts, Ciscos, and Apples at a lower cost of doing business then the business would relocate. Clearly, these American corporations elect to keep their HQs in the U.S. after due consideration (no doubt, they exercise appropriate due diligence review of this and other business judgment rule decisions as required by their corporate fiduciary duty to their shareholders). The foreign-held profits of the parent company belong to the parent company. The taxes owed on these profits are due and oweing. Absent the advantages of operating from within the U.S. these profits simply would not exist.

Just because the funds can be held outside the parent corporation's domicilary nation does not eliminate the tax debt owed that sovereign nation. But for the business advantages provided by the U.S. these companies could not exist as they do today - and - now that time to pay a fair measure of tax on these profits has arrived the blasted Free Rider doctrine raises its ugly head.

Either leave the U.S. and keep the funds overseas or else admit that the benefits of doing business from the U.S. are well worth the taxes due, and pay up. Any other result is just another free rider on the back of the U.S.

In this day and age and facing the dire financial straits that the U.S. has - it is a criminal act to hold the nation hostage for tax concessions.

Ultimately it is just this simple: when they started out to earn these profits the companies' executives and legal counsel knew that paying taxes on profits was part of the deal.
post #25 of 51
Quote:
Originally Posted by Bought_it@AAPL View Post


Why should U.S. headquartered corporations be permitted to hold the profits from their, wholly-owned, foreign subsidiaries in offshore accounts? I'd point out that the U.S. gave these companies the infrastructure, educated workforce, and the legal framework necessary for these companies to have achieved the successes that they have, and (obviously, from the subject of this thread) continue to enjoy. If some other nation would serve the needs of the Microsofts, Ciscos, and Apples at a lower cost of doing business then the business would relocate. Clearly, these American corporations elect to keep their HQs in the U.S. after due consideration (no doubt, they exercise appropriate due diligence review of this and other business judgment rule decisions as required by their corporate fiduciary duty to their shareholders). The foreign-held profits of the parent company belong to the parent company. The taxes owed on these profits are due and oweing. Absent the advantages of operating from within the U.S. these profits simply would not exist.
Just because the funds can be held outside the parent corporation's domicilary nation does not eliminate the tax debt owed that sovereign nation. But for the business advantages provided by the U.S. these companies could not exist as they do today - and - now that time to pay a fair measure of tax on these profits has arrived the blasted Free Rider doctrine raises its ugly head.
Either leave the U.S. and keep the funds overseas or else admit that the benefits of doing business from the U.S. are well worth the taxes due, and pay up. Any other result is just another free rider on the back of the U.S.
In this day and age and facing the dire financial straits that the U.S. has - it is a criminal act to hold the nation hostage for tax concessions.
Ultimately it is just this simple: when they started out to earn these profits the companies' executives and legal counsel knew that paying taxes on profits was part of the deal.

Funny how much you managed to type without a direct response to his/her query.

post #26 of 51
Quote:
Originally Posted by Tallest Skil View Post


And to top it all off, the sign still uses Garamond (though the image may be dated).

 

They changed all the signs I think during 2008, so that photo must be pretty dated.

post #27 of 51

haha - this would be hilarious if there weren't so much at stake.

 

the story is about apple exploiting tax loopholes in order to avoid paying the tax that they would otherwise be required to pay in order to help the local economies (and the people) who live in the areas that service their facillities, and instead people would rather talk about the font that there signage is painted in.

 

not everyone who works for apple is a designer or top exec. apple need people to clean their offices, to take away their trash, maintain their transport links, roads, and so on. all these things come out of funds raised by public taxation. in choosing to hoard their money off-shore, apple is simply trying to do everything they can to avoid giving back to the local communities on which they rely.

 

and of *course* they are not doing anything illegal. and of *course* there will be people on this forum who have vested interests in apple making as much profit as possible. but let's not try and paint this as anything other than apple taking the decision to straightforwardly put profits over the wellbeing of the people who help them do business. some on here are going to think 'go for it'. but, i hope, not many are that selfish or unwilling to look beyond their own situation to put themselves in the shoes of people who have less, and rely on industries like apple to pay their fair share.

 

and let's not have anyone use the 'well, if they don't like working for apple they can quit and get another job' argument. this is a hoax, and an insulting one. many people simply cannot upstages and leave their local community. not because they're lazy, but because it's too much upheaval: they might have family that can't move with them, they might have kids that they can't take out of school, or any one of countless other things. people do what they can in, quite often, difficult circumstances and in off-shoring its financial resources in order to avoid paying tax apple is making it harder for people, not easier.

post #28 of 51

arrow_up_1.png

Single post troll.

 

Who wants to take the bait?

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post #29 of 51

hi - yes, i joined appleinsider today. does this mean i'm not allowed to express my opinion? everyone has to have a 'first post', don't they?

 

also, by 'troll' here i assume you mean 'someone who i don't agree with'?  

post #30 of 51
Quote:
Originally Posted by philster1919 View Post

hi - yes, i joined appleinsider today. does this mean i'm not allowed to express my opinion? everyone has to have a 'first post', don't they?

 

also, by 'troll' here i assume you mean 'someone who i don't agree with'?  

 

I also run a company in Ireland. Does that mean I am also exploiting a tax loophole by paying Irish tax? Or is it ok for me to do so, but not ok for Apple?

post #31 of 51

do you hold as much of your cash reserves in offshore accounts so as to pay as little as possible to the irish government? do you, like apple, also hold as many cash reserves in offshore accounts based in the Virgin islands so as to circumvent local tax regulations? if so, then yes you are.

post #32 of 51
Quote:
Originally Posted by SolipsismX View Post

They aren't keeping all their cash overseas. Cash in other countries was earned in other countries. They're also paying taxes as those countries require. The only thing they aren't doing is bringing that cash back earned outside the US back to the US when they don't need to.

Exactly. So many reporters frame this as if Apple were somehow moving money off shore in some sneaky tax avoidance scheme. The US might want to consider this money, as you point out, has already been taxed locally. Allowing Apple to bring it home would be a benefit to the USA as Apple is investing heavily in jobs and infrastructure here. Why insist on double taxation?
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post #33 of 51
Quote:
Originally Posted by Robin Hood View Post

I also run a company in Ireland. Does that mean I am also exploiting a tax loophole by paying Irish tax? Or is it ok for me to do so, but not ok for Apple?

It is ironic that a country so proud of its stance against unfair tea taxes by Great Britain wants to impose double taxation on one of its own.

I assume you don't give the Sherrif of Notingham any either ... /wink
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post #34 of 51

digitalclips has hit the nail on the head. This money has already been taxed overseas, why does the US want to tax it again? That would effectively create double taxation, where you earn money, pay your taxes, and than pay taxes on what's left over after you've already paid taxes again. Forcing US businesses to transfer all their income they generate internationally back to the US and pay taxes on it twice would cripple US businesses and put them at a disadvantage.

 

For what it's worth, Apple runs a significant operation here in Ireland with thousands of employees, and pays a lot of taxes here. This isn't some fly by night operation: Apple have had a significant presence in Cork, Ireland since 1980. Ireland may have lower taxes than some countries, but it is by no means a tax haven. In fact, lots of people here complain that if anything, our taxes should be lower.


Edited by Robin Hood - 7/10/12 at 4:27am
post #35 of 51
Quote:
Originally Posted by Smallwheels View Post

Individual citizens of the USA who work overseas must pay income tax on any money they earn while abroad. It isn't fair at all.

 

 

 

As a US citizen living overseas they have a hope in hell of getting a cent out of me! Mind you I don't plan on living in the US again so it doesn't really matter anyway.

post #36 of 51
Quote:
Originally Posted by lamewing View Post

I wish I could keep all my cash overseas and avoid paying taxes...all the while doing business here in the U.S.

You can. If you move overseas and earn cash at your new location, the US government has no claim on it.

Quote:
Originally Posted by Smallwheels View Post

Individual citizens of the USA who work overseas must pay income tax on any money they earn while abroad. It isn't fair at all.

Not true. As a US citizen, if your residence is in Ireland (or anywhere else), you do not pay tax on income earned outside the US.

If your residence is the US, that might be a different matter, but it's moot - since Apple Ireland is not a US company.
Quote:
Originally Posted by philster1919 View Post

haha - this would be hilarious if there weren't so much at stake.

the story is about apple exploiting tax loopholes in order to avoid paying the tax that they would otherwise be required to pay in order to help the local economies (and the people) who live in the areas that service their facillities, and instead people would rather talk about the font that there signage is painted in.

OK, let's do a reality check. Before you criticize Apple for 'exploiting tax loopholes', let's see what that means.

You are probably entitled to a single deduction for yourself on your tax return. That is a tax loophole. Do you use it?
You are entitled to a standard deduction or itemized deductions. That is a tax loophole. Do you use it?
Items shipped between states may be exempt from local sales tax (although a use tax would apply in many cases). That is a tax loophole. Do you use it?
If you live in a state with sales tax and you buy something in a state without sales tax, that is a tax loophole. Do you use it or do you pay the sales tax, anyway?

Now, if you forego all of those tax loopholes, you might be able to complain that Apple is being unfair, but even then, I would argue that you're wrong. Apple's job is to maximize return for its shareholders. That means taking advantage of local tax laws wherever possible. It's up to the government to write tax policies and up to Apple to follow them. Apple should not be expected to pay taxes that the law does not require.
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post #37 of 51
Quote:
Originally Posted by jragosta View Post

OK, let's do a reality check. Before you criticize Apple for 'exploiting tax loopholes', let's see what that means.
You are probably entitled to a single deduction for yourself on your tax return. That is a tax loophole. Do you use it?
You are entitled to a standard deduction or itemized deductions. That is a tax loophole. Do you use it?
Items shipped between states may be exempt from local sales tax (although a use tax would apply in many cases). That is a tax loophole. Do you use it?
If you live in a state with sales tax and you buy something in a state without sales tax, that is a tax loophole. Do you use it or do you pay the sales tax, anyway?
Now, if you forego all of those tax loopholes, you might be able to complain that Apple is being unfair, but even then, I would argue that you're wrong. Apple's job is to maximize return for its shareholders. That means taking advantage of local tax laws wherever possible. It's up to the government to write tax policies and up to Apple to follow them. Apple should not be expected to pay taxes that the law does not require.

TBH, I have no view on Apple's tax affairs, but your definition of a loophole is incorrect.

 

The situations you cite are just normal tax rules, not loopholes.  A tax loophole is where someone finds a way to circumvent certain tax rules without breaking the law.  One is adhering to the rules, the other is adhering to none (whilst not breaking any either).

post #38 of 51

reefoid, I don't understand how incorporating in Ireland is a tax loophole. I've incorporated my company here as well, and I pay my taxes. Am I exploiting a loophole? Or is it ok because I'm not an American citizen? Should companies founded by Americans be forced to transfer all their international profits back to the US and made to pay taxes twice? Wouldn't that result in American innovation being disadvantaged rather than being put on an equal footing? 

post #39 of 51
Quote:
Originally Posted by Robin Hood View Post

reefoid, I don't understand how incorporating in Ireland is a tax loophole. I've incorporated my company here as well, and I pay my taxes. Am I exploiting a loophole? Or is it ok because I'm not an American citizen? Should companies founded by Americans be forced to transfer all their international profits back to the US and made to pay taxes twice? Wouldn't that result in American innovation being disadvantaged rather than being put on an equal footing? 

As I said I don't have a view on Apple's tax affairs as I'm not a tax expert so I can't say whether its a loophole or not.  I was just pointing out there is a difference between tax rules (which governments define) and loopholes (which are, generally, side-effects of changing tax rules).  I'm sure Apple is exploiting loopholes to reduce their taxes across the globe, but then any multi-national company is doing the same.  Its down to government to identify and close them if they believe companies are abusing them.  You can't blame the corporations, they answer to their shareholders.

post #40 of 51

I understand that. Many so-called tax loopholes are deliberate decisions by Governments. For example, the Irish Government deliberately set corporation tax at 12.5%. It isn't a loophole that was created accidentally. As a business owner, I actually think it's still too high and would prefer it to be lower.

 

They also recently made a decision that new companies benefit from 0% corporation tax for the first 3 years. Again, that was a deliberate decision designed to encourage new businesses and therefore revitalise the economy, which will result in more tax revenue in the long run.

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