By Prem Sikka
The current cash mountain of US$178 billion is largely managed through Braeburn Capital, a subsidiary company located in Nevada in the US (a state that doesn’t levy any corporate income tax on profits). Only US$19. 5 billion of this stockpile is in hard cash.
The committee reported that Apple paid US$5. 3 billion in US corporate taxes between 2009 to 2011 on its global profits of US$65 billion over that period (the US levies taxes on the worldwide profits of companies).
The irony of all this is that Apple’s profits are causing an increasing build-up of cash and marketable securities that the company isn’t free to use in any way it wants.
Despite spending more than US$90 billion to buy back its own shares, the cash mountain remains and continues to grow with soaring iPhone sales.
Its 2014 accounts (see the report, pages 63-64) show that on foreign profits of US$33. 6 billion it may pay tax of only US$2. 15 billion, an effective rate of 6. 4 per cent.
Read more here: Business Spectator