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Thoughts on Overseas Cash and Taxation
Wednesday, December 20, 2017

While the tax bill is en route to the President’s desk for signature, Calcbench, the curious bunch we are, decided to do a little poking around.

The Wall Street Journal article cited here claims that, “U.S. corporations will pay a one-time tax of up to 15.5% on profits they have stockpiled abroad.” Does this mean tax on unremitted foreign earnings or does it mean tax on cash? We needed more information, so we turned to the tax bill itself. About halfway down page 1014, we found it:

We understood this to mean a tax on cash abroad. So here’s where it got fun; we turned to our multi-company viewer, searched the whole universe of firms for “overseas cash” (top 10 below), and then ran a trace on Microsoft.

The yellow arrow in the picture above points to the “trace” feature which gives a user full transparency into the metric.  In this case, it would open a window into the disclosure itself and show the footnote where the value came from. You can read more about our unique tool and how it works in this tutorial here.

But back to our trace on Microsoft, what did we find?

The trace revealed $1.5B in foreign government bonds but also showed us other little gems like short term investments of almost $3.8B.

So what does this all mean? Will these overseas assets be subject to the 15.5% tax rate under the newly passed tax LAW? That could have implications for some of those heavy hitter firms from our search (Apple, Google, Johnson & Johnson, and more) but… we’ll leave that analysis up to you.

We encourage you to embrace your curiosity on the subject and as always, trust Calcbench to help you through it.


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