The company paid $713 million in taxes on $36.87 billion in foreign profits, according to its annual filing with the Securities and Exchange Commission. The Sunday Times was the first to spot the figure.
In comparison, Apple paid $12.26 billion in federal taxes for profits generated in the U.S., and $1.06 billion in state taxes.
Apple, like many other global companies, generate much of its profits overseas where tax rates are more favorable. But the profits are often stuck overseas, because they would be taxed at the higher 35 percent U.S. corporate rate if they were brought home, a process known as repatriation. Many companies, such as Cisco Systems, have argued for tax relief for the repatriation of foreign profits.
As defenders note, what Apple is paying overseas isn't illegal, and the company isn't even using any tax loopholes in avoiding paying higher taxes. Forbes pointed out that in the U.K., corporations that don't have a branch in the country don't pay taxes on profits they generate in that country, since they are supposed to paid back in the home country.
But there have been increasing calls for large technology companies that do have a presence overseas to pay a higher share of taxes. ZDNet's Zack Whittaker's writes that companies such as Apple and Amazon don't pull enough of their weight when it comes to paying corporate taxes. While he notes that no companies are breaking any rules, there needs to be a reform of the regulations.
These technology giants are playing by the rules, but the problem is the rules are broken. Who sets the rules? The government. And yet the government all but takes it out on the individual taxpayer by making them drag the country out of economic downturn kicking and screaming.
For Apple, foreign profits are an increasingly important stream as the U.S. market begins to mature. While demand for Apple products remains high here, there are few willing consumers who don't already own an Apple product, dampening its growth prospects down the line. As a result, emerging markets such as China and India are seen as the drivers of Apple's future profits.
It doesn't hurt that the tax rates are lower over there either.
Apple - USE TAG
reading•Apple's taxes on overseas profits last year: Less than 2 percent
Sep 20•Apple donates $1M to Red Cross in response to Hurricane Florence
Sep 20•iPhone XS reviews are in, and our Apple Watch Series 4 first impressions
Sep 19•Apple Watch Series 4 review in progress: First impressions
Sep 19•Google teams up with T-Mobile on more-accurate 911 location data