But Apple does face one possible disadvantage with its investments. Most of Apple’s cash is overseas, which means Apple would face a large tax burden if it tries to bring it back to the U.S.
On one hand, Apple has already found a use for this capital with its investment in Didi. Paul Gillis, a professor at Peking University’s Guanghua School of Management, said Apple will likely use profit from Chinese sales held in its corporate subsidiaries in China for the Didi investment. Investing the capital, instead of trying to bring it back to the U.S., avoids a 5% to 10% tax China charges for removing proceeds from the country as well as U.S. repatriation taxes
“Using it to buy an interest in Didi is a legitimate way to use those funds without any tax consequences because those funds remain in China and remain Chinese assets,” Gillis said. “That wouldn’t be evading taxes doing that. They’re just making a decision not to take the money back to the U.S. and doing something else.”More in Marketplace.
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