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Apple Hit With Massive Tax Bill in Ireland

Apple Inc. is well regarded across the world is being one of the most successful companies in the world. The company has released dozens of innovated products over the past few decades that have revolutionized the world. Along with their technology and innovation success, the company has been equally as successful financially. However, according to a recent news report (http://mobile.reuters.com/article/idUSKCN114211?il=0), Apple is now facing some significant foreign taxes.

 

Over the past few years the United States and various countries in Europe have been investigating the amount of federal taxes that Apple has paid in Ireland. The investigation determined that in Ireland Apple has been taking around a 2% national tax rate. This is compared to the typical tax rate in Ireland of around 15% for corporations. It has been suggested that Ireland has provided apple with favorable tax rates to encourage the company to continue to do business and grow in Ireland.

 

While this reduced tax rate has been beneficial for Apple and likely continued apples expansion in Ireland, it has created an unfair advantage. Due to the unfair advantage that Apple has received, the European Union and United States are strongly recommending that Apple repay to Ireland the amount of taxes that they saved. At this point, it is estimated that the total liability that Apple will owe could easily total over 15 billion United States dollars.

 

While the $15 billion tax bill is very significant, Apple appears that they will be able to absorb the financial hit. Apple currently it’s considered one of the wealthiest companies in the world. On their most recent audit balance sheet Apple reported that they have over $230 billion in the bank. Before trading opened the day that the tax bill was announced Apple shares were trading down about 3%. However, it does not appear that investors will be seriously based by this issue. By the end of the day Apple shares had increased a bit and were down less than 1%. Most investors seemed unconcerned that the tax benefit was received in other places beyond Ireland.

 

Apple Ventures into Fund and Startup Investing Again

Apple has had to deal with a host of ups and downs in 2016, but the legendary computer and technology company shows no signs of slowing down its agenda for 2017. Apple has recently made news over speculation the company will direct $1 billion towards a massive tech fund run by Softbank. This comes on the heels of the CEO of Softbank announcing $50 billion would be invested in the United States market.

 

Apple has not yet agreed to put money into the soon-to-be-massive fund, but indicators show the company is definitely seriously discussing investing in the fund seriously. Apple had lost some money over the past year due to the troubles with the Apple Watch, one of the least appreciated releases ardent Apple consumers have been exposed to. Bugs and glitches galore sunk the Apple watch in the market. Losses definitely mounted as a result. A successful investment in the new fund would provide a great assist to Apple since the company could recoup money through a reliable return.

 

The return on investment from the fund could end up being a long term hedge. A mere 4% return on investment would yield $40 million in a single year. Over ten years, minus compounded interest, the figure would be $400 million. All this assumes the fund would yield a positive return. No guarantees exist on how the fund will do, but Apple is surely hoping for the best.

 

Apple is not new to the concept of investing outside of its own direct business ventures. Apple has consistently put money into startups. Buying into a startup could lead to purchasing outright controlling interest in the company once the startup takes off. The infusion of Apple investment capital definitely assists into a startup can do a lot to improve the new venture’s chances for success.

 

Startups often burn through cash during the early stages. Investment funds and support from a giant such as Apple can put a struggling startup on firm footing. Apple also knows it can expand its own vital holdings once a startup takes off and is a success.

 

The potential Softbank deal shows Apple is always on the move looking to increase its value at every turn. If the deal goes through, then Apple becomes part of another major player in the tech world.

Apple Hit With Massive Tax Bill in Ireland

Apple Inc. is well regarded across the world is being one of the most successful companies in the world. The company has released dozens of innovated products over the past few decades that have revolutionized the world. Along with their technology and innovation success, the company has been equally as successful financially. However, according to a recent news report (http://mobile.reuters.com/article/idUSKCN114211?il=0), Apple is now facing some significant foreign taxes.

Over the past few years the United States and various countries in Europe have been investigating the amount of federal taxes that Apple has paid in Ireland. The investigation determined that in Ireland Apple has been taking around a 2% national tax rate. This is compared to the typical tax rate in Ireland of around 15% for corporations. It has been suggested that Ireland has provided apple with favorable tax rates to encourage the company to continue to do business and grow in Ireland.

While this reduced tax rate has been beneficial for Apple and likely continued apples expansion in Ireland, it has created an unfair advantage. Due to the unfair advantage that Apple has received, the European Union and United States are strongly recommending that Apple repay to Ireland the amount of taxes that they saved. At this point, it is estimated that the total liability that Apple will owe could easily total over 15 billion United States dollars.

While the $15 billion tax bill is very significant, Apple appears that they will be able to absorb the financial hit. Apple currently it’s considered one of the wealthiest companies in the world. On their most recent audit balance sheet Apple reported that they have over $230 billion in the bank. Before trading opened the day that the tax bill was announced Apple shares were trading down about 3%. However, it does not appear that investors will be seriously based by this issue. By the end of the day Apple shares had increased a bit and were down less than 1%. Most investors seemed unconcerned that the tax benefit was received in other places beyond Ireland.