The Associated Press – NEW YORK (AP) Apple is to pay a record $1 billion in U.S. federal taxes, its biggest ever tax bill and a major boost to its business.
Apple reported a $2 billion tax bill for fiscal year 2018 and paid $1,000 per employee for all of its overseas employees, with the largest chunk of the tax bill going to foreign subsidiaries.
The company also paid $300 million in penalties and interest, with about $300,000 of that for tax related to a tax-related dispute.
Apple’s total federal tax bill in the first quarter of fiscal 2019 was $7.3 billion, up 8.9 percent from the same quarter a year earlier.
In a statement, Apple said the tax bills were a “good outcome” and it will make a final decision on the future of the company’s overseas operations “in the coming weeks.”
The company reported $3.1 billion revenue in fiscal 2019, including $1bn in sales in the U.K.
The company will also have to pay penalties and tax in the Netherlands and China, which have become its largest markets, the company said.
The tax bill will also add to a $3 billion tax liability it already had on foreign earnings.
The tax bills represent the largest tax relief Apple has ever received.
It paid $13.6 billion in taxes in the fiscal year ending Sept. 30, up 6.6 percent from a year ago.
The government has been pressuring Apple to bring more overseas manufacturing back to the U, which has a low corporate tax rate of 15 percent, and has been making a point of pushing for Apple to make inroads in China, where the tax rate is more than 70 percent.
Apple said in October it was planning to bring back manufacturing in China.
Apple CEO Tim Cook said in November that the company had reached an agreement with China to begin building a $1 trillion factory.
The new tax bill is significant for Apple because it represents the largest payment Apple has received from the government in its history, and because it has become one of the biggest foreign tax evaders, with a tax bill that dwarfs all other multinationals combined.
Apple has said it will bring back production in China after the tax legislation.
Apple has been lobbying for the tax relief, arguing that its tax burden has been growing steadily and has more than doubled over the last three years.
Apple said it expects the tax savings to add $3 trillion to its fiscal 2019 operating income.
The companies announced a new tax incentive program in July, which Apple said will help the company pay a higher share of its tax bill to the government.
Apple also said it would provide a one-time $200 million tax refund to the IRS for its employees and small businesses.