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Apple to invest $10 billion in U.S. data centres

Fri 19 Jan 2018

Apple is set to spend more than $10 billion (approx. £7.2 billion) on data centres in the U.S. as part of a broader investment drive.

The Cupertino giant claims that it is already responsible for more than two million jobs in the States, and states that it intends to ramp that up over the coming years.

As part of that drive, it intends to build on its data centre portfolio, which already covers seven U.S. states, including North Carolina, Oregon, Nevada, Arizona and a recently announced project in Iowa. The news comes as the firm breaks ground on a new facility in Reno, Nevada.

Apple’s initiative aims to create jobs on three fronts; direct employment, through its domestic suppliers and manufacturers, and what it describes as the ‘app economy’, which it credits itself with having played a major part in thanks to the iPhone and the App Store.

The combination of these new investments and its existing spending plans, which amount to $55 billion in 2018, means that it expects to directly contribute more than $350 billion to the U.S. economy in the next five years.

Apple CEO, Tim Cook, said: “Apple is a success story that could only have happened in America, and we are proud to build on our long history of support for the U.S. economy.”

There is a more controversial element to Apple’s announcement, which is the £38 billion repatriation payment that it will make. A repatriation payment is a unique part of America’s tax system, in which companies have to pay tax in the U.S. on money it makes abroad, as well as in the country in which it makes that money.

Previously, many companies, including Apple, had continuously deferred that payment by keeping foreign profits away from American soil so as to avoid the 35% repatriation rate. But one of Donald Trump’s flagship pieces of legislation reduced this rate by more than half, in order to incentivise companies into paying into U.S. coffers.

This seems to have worked for Apple, who claim that the $38 billion repatriation payment will be the largest of its kind ever made. This move is likely to irritate tax administrators in other countries where Apple has made money.

The EU ruled in 2016 that Apple owed Ireland $16 billion in unpaid taxes, and a spokesman for the European Commission confirmed that Apple’s repatriation payment to the U.S. will not change that ruling.


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