Apple's 'Offshore' Billions? They're in Manhattan
Has $102B in 'overseas' profits right here, and the IRS can't touch it
By Ruth Brown, Newser Staff
Posted May 22, 2013 7:23 AM CDT
Updated May 22, 2013 7:41 AM CDT
Apple CEO Tim Cook testifies on Capitol Hill in Washington before the Senate Homeland Security and Governmental Affairs Permanent subcommittee on Investigations.   (AP Photo/J. Scott Applewhite)

(Newser) – Tim Cook went before the Senate yesterday, answering accusations that Apple is keeping billions from the IRS' clutches by holding it in overseas subsidiaries. Only that money isn't actually overseas, the New York Times reports—its $102 billion in offshore profits is managed by a subsidiary based in Nevada and is held in a New York bank. But because the money is earmarked for two Irish subsidiaries, the tax code says it's nontaxable. Apple is hardly alone: More than $1.6 trillion designated as "permanently invested overseas" is currently being held by US-based multinationals.

The government estimates it would get an additional $42 billion this year alone if foreign profits were fully taxed (for context, the Times notes that sum would have shaved the sequester's spending cuts by about half). But companies counter that they can't compete on a global scale with America's 35% tax rate, and many, including Apple, are now pushing government for a "repatriation holiday," which would allow them to bring the money home at a heavily reduced rate. "The offshore companies are a fiction and the statement that the money is offshore is a fiction," says one former Congressional Joint Committee on Taxation staffer. "What they are asking for is a reward for having gamed the system."

More From Newser
My Take on This Story
To report an error on this story,
notify our editors.
Apple's 'Offshore' Billions? They're in Manhattan is...
6%
9%
6%
16%
3%
60%
Show results without voting
You Might Like
Comments
Showing 3 of 75 comments
Comp_User
May 23, 2013 7:16 AM CDT
What a waste of time and tax payers money (except for AAPL) Congressmen hold so much of AAPL's stock they are never going to do anything to hurt their own pocket book. This is just an expensive play put on by congress to pretend to protect the American public !!!
K.KRANK
May 22, 2013 7:28 PM CDT
The hilarious thing about this is they're just taking advantage of the tax loopholes & credits & rules Congress has written into the tax code for big businesses & Corporations for many decades now lol So after all this, all these decades of giving the companies all these special exemptions & credits & loopholes today it leads to companies with hundreds of billions in profit kept here at home & the government doesn't get any of it in the form of taxes? Gee, go figure lol
Ferd66
May 22, 2013 1:47 PM CDT
The U.S. creates unfair obstacles to business, especially small business, and it gets worse with every passing administration. Small businesses don't have the means to create offshore bank accounts and can't take advantage of certain loopholes. Because of this situation, which the government has created, you flounder as a small business owner, or find a path to very rapid growth.