Most of the top companies in US take advantage of the tax laws which exempt the taxes on profits made on foreign lands as long as the cash isn’t brought back to the US. Because of this exemption the top 60 companies in US account to nearly $166 billion in cash outside of the US. Apple alone has a cash reserve of nearly $40 billion which Apple has saved in countries that have more relaxed tax laws.
Apple hasn’t really revealed any plans to make a good use of that money yet. But chief investment officer Howard Ward of Gamco Investors suggest that Apple is finally going to reveal its plans to make some enormous investments with its cash reserves next month. There have been overgrowing criticisms about Apple’s lack of plans for its valuable cash reserve of $137 billion and it is high time Apple proves them wrong says Ward.
There have been various amounts of suggestions and opinions pouring in for Apple, with David Einhorn suggesting that Apple has to give high-yield preferred shares to investors and spread the funds. Keith Goddard suggests that Apple has to announce higher dividend and a better shares buyback plan.
Earlier Warren Buffet also suggested that Tim Cook should stop worrying about the stock price crash and plan for a larger buyback of its stock as the price is quite low now.
US isn’t the only country where Apple and other large companies evade taxes, many companies like Google and Amazon base their operations out of countries like Ireland just to save taxes and avoid paying hefty taxes to the US government. If Apple were to bring back its cash reserve of $40 billion back to the US it will have to shell out around $14 billion only as a mandatory 35% tax to the US government.
The iPhone Help
The iPhone Help