A new part of the GOP tax law has some of the United States’ biggest companies, from Apple to Goldman Sachs, already reporting major losses. The expenses stem from a one-time tax charge to repatriate, or return to its home country, overseas cash or funds.
Overseas cash repatriation is an issue that’s been important to multinational corporations for a long time. It’s estimated that more than $2.6 trillion in corporate profits have been sitting in foreign bank accounts waiting for a tax break to be freed up. Apple’s overseas cash alone amounted to $252.3 billion, a treasure trove the company had been loathe to repatriate due to how much it would lose paying foreign cash taxes.
The new GOP tax law allows U.S. companies to repatriate cash at reduced rates for a limited time. As a part of the tax reform, repatriation tax rates could be as low as 8%, compared to the 35% companies traditionally pay to repatriate that money, the New York Times reports.
While some companies have announced what they’ll pay for the repatriation taxes, others are expected to report their losses in the near future. For instance, Microsoft has yet to announce exactly how it will be affected by the tax reform, but its latest quarterly report cites the company has $132 billion in overseas funds. Here’s a list of the companies with the biggest overseas tax bills, updated regularly as the bucks come home.
Apple
Apple has the largest overseas cash stash out of any United States company, according to Market Watch. The company reported it would pay $38 billion for a one-time tax payment to repatriate its cash holdings, according to The Wall Street Journal. The expense accounts for 15.5% of the $252.3 billion Apple had in overseas cash.
Breaking ground in Reno today with @GovSandoval & @MayorSchieve as part of our data center expansion plan, one of many Apple initiatives which will contribute $350 billion to the U.S. economy and create 20,000 new jobs over the next 5 years. pic.twitter.com/g40dlHsxuC
— Tim Cook (@tim_cook) January 17, 2018
Citigroup
Citigroup reported an $18 billion quarterly toss Tuesday — after paying $22 billion in repatriation taxes, according to Reuters.
In tweet posted on Citi’s account, CEO Michael Corbat said the “tax reform is a clear net positive.”
On balance, tax reform is a clear net positive for Citi and its shareholders and will help us achieve our goals of improving our return on and increasing our return of capital. – CEO Corbat https://t.co/7V004Zsxpo
— Citi (@Citi) January 16, 2018
Goldman Sachs
Wall Street bank Goldman Sachs announced its first quarterly loss in six years, due to the one-time overseas cash tax payment. According to Reuters, the company paid $4.4 billion in repatriation taxes due to the new regulations, an amount that was entirely expected by Wall Street. As a result, the company posted a $1.93 billion loss, news that sent the company’s stock down, despite the expected financial blow.
Bank of America
Repatriation tax took a big chunk out of Bank of American’s quarterly profit, according to Reuters, which reported that the company will pay pay $2.9 billion due to the new legislation. That was enough to cut the bank’s quarterly profits in half.
American Express
Credit card company American Express suffered its first quarterly loss in over two decades due to the new tax law, CNN Money reported. American Express is paying $2.6 billion in repatriation taxes, and saw a total loss of $1.2 billion, according to Reuters, leading to its first quarter in the red since 1992.
JP Morgan Chase
The largest U.S. bank said it will have to pay $2.4 billion for its overseas cash, CNN Money reported. Company CEO Jamie Dimon believes that repatriation could serve as a sort of economic stimulus for the U.S., according to CNBC.
