Apple broke

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Maybe they'll give just over 1% to investors in Europe...and earn much more with it elsewhere.
 
The answer is In the article you linked to. Did you read it?

The article the OP provided said:
The company reckons that it is a better decision to raise funds at a 1-percent interest rate rather than bring money back to the United States and face significantly higher costs through taxation. The choice to pursue this offering certainly does highlight a glaring flaw in our tax regulations. Companies with plenty of cash park assets outside of the United States to avoid taxes; how does THAT help U.S. GDP? But for Apple shareholders, it's a shrewd decision and one that many companies are pursuing in this low interest-rate environment.
 
The answer is In the article you linked to. Did you read it?

I read it.

Perhap you can answer this question for me? If Apple holding cash in Europe to avoid 'repatriation to US', why borrow cash in Europe?

the edit: ok thank, I read some more. They borrow the Euro, but from US. Not borrow to spend in Europe.

thank you!
 
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I read it.

Perhap you can answer this question for me? If Apple holding cash in Europe to avoid 'repatriation to US', why borrow cash in Europe?

...maybe because they are not taxed on a loan.
 
Couple of plays here. The interest on the US based euro debt will be tax deductible at (high) US rates. The cash they leave in Europe as a Euro holding will be generating a similar level of interest but will be taxed lightly if at all via various structures. They will be indifferent to the interest rate - but denominating the debt in Euro gives them a natural hedge against dollar/euro currency movements.

But the alternative (dividending the cash up the chain to the US) will likely be massively expensive as I doubt they have much if any foreign tax credits attaching to these earnings - so in principle the dividend will be taxable in the US at 35%+. Given a system like that, you would never distribute funds to the US while you could borrow for cash flow needs instead.
 

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