Apple to pay US$38 billion in taxes on foreign cash

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Apple to pay US$38 billion in taxes on foreign cash

Investment plan to fund new US campus, data centres.

Apple will make about US$38 billion (A$47.5 billion) in tax payments on its overseas cash and plans to open a second US campus as part of a five-year, US$30 billion investment plan.

Apple said it plans a wave of investing and hiring in the United States and will create 20,000 jobs through hiring at its existing campus and the new one. It will announce the location later this year.

About a third of the new spending will be on data centres to house its iCloud, App Store and Apple Music services.

The company has data centres in seven states and also today broke ground on an expansion of its operations in Reno, Nevada, where local officials granted it tax breaks on a downtown warehouse.

The announced tax payment was roughly in line with what analysts expected from the tax bill, which requires companies to pay a one-time tax on foreign-held earnings whether they intend to bring them back to the United States or not.

Apple has US$252.3 billion in cash abroad and previously had set aside US$36.3 billion in anticipation of tax payments on its foreign cash, meaning the payment would not represent a major impact on its cash flow this quarter.

Apple did not indicate how much, if any, of its cash it would actually bring back to the United States.

Apple also said it would boost its advanced manufacturing fund, which it uses to provide capital and support to suppliers such as Finisar and Corning, from US$1 billion to US$5 billion. Apple said it plans to spend US$55 billion with US-based suppliers in 2018, up from US$50 billion last year.

Apple joins Amazon in scouting for a location for a second campus. Amazon finished taking applications from cities in October for its second campus.

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