Trump's tax plan could save Apple big bucks if it repatriates overseas cash holdings
On the campaign trail, Donald Trump attacked Apple for a number of different reasons. Early in the year, he tried to start a boycott of the company because of its refusal to unlock an iPhone that belonged to a deceased terrorist. He also complained that Apple was manufacturing its products using overseas labor. He called for a 35% import tax on products made by U.S. companies in other countries.
Yet, Trump's proposed tax plan could actually help Apple save a ton of money if it becomes the law of the land. Thanks in great part to the iPhone, Apple currently has an astounding cash hoard of $237 billion. Close to $200 billion of that money is currently sitting in overseas bank vaults, collecting interest. A chart produced by Statista reveals that only $16.6 billion of Apple's cash holdings are in U.S. banks. Apple keeps its funds overseas so that the company isn't required to pay the top corporate tax rate of 35% in the U.S.
This isn't unusual in the corporate world. Many pharmaceutical firms keep money in overseas banks, and other tech firms like Google also keep a large amount of cash overseas. All of these companies, including Apple, will be given a chance to bring home a large amount of money at a significant tax savings according to the President-Elect's web site. Funds repatriated back to the U.S. will be subject to a one time tax of 10% instead of the current 35%.
We don't know how much money Apple would choose to bring back home if this Tax holiday becomes law. But considering that it would be a one-time break, we wouldn't be surprised if the tech titan wired at least half of its overseas cash holdings back home.
source: TrumpTaxPlan via BGR