Apple to pay $38bn on foreign cash pile

Apple will pay about $38bn (£27.3bn) in tax on the roughly $250bn cash pile it holds outside the US following recent changes to American tax rules.

The sum is expected to be the biggest payment under the reforms, which slash the US corporate tax rate.

The tech giant also plans to build a new campus and create 20,000 new jobs in the US.

Apple said its plans would contribute more than $350bn to the US economy over the next five years.

The company has not said how much of its cash abroad would be brought back to the US.

Chief executive Tim Cook said Apple is "focusing our investments in areas where we can have a direct impact on job creation".

Apple employs about 84,000 people in the US and expects to spend $55bn with domestic suppliers and manufacturers this year.

The company has data centres in seven states. On Wednesday, it broke ground on an expansion of its operations in Reno, Nevada.

It plans to spend more than $10bn on data centres over five years, as part of a $30bn capital spending plan for the US.

The location of Apple's new campus, which will house technical support staff, will be announced later in 2018.

Apple had earlier said it planned $16bn in capital expenditures in 2018, up from about $15bn in the prior year.

Apple is the latest company to promote plans to invest in America following the overhaul of the US tax code.

The changes cut the corporate rate from 35% to 21%. They also stopped applying the corporate rate to profits that companies make overseas, in exchange for a one-off tax payment.

President Donald Trump had argued the cuts would make the US more competitive and spur domestic companies to invest at home.

House Speaker Paul Ryan, a Republican congressman who spearheaded the tax overhaul, celebrated Apple's plans to invest in a post on Twitter.

"This is great news for the American economy and for America's workers," he said.

Opponents to the new tax law predicted much of the money firms saved from the cuts would go to share buybacks and higher dividends.

CFRA Research analyst Angelo Zino said on Wednesday he expects Apple could repurchase as much as 10% of its shares over the next 12 to 18 months.

The company has spent $166bn already to repurchase shares under a plan to return $300bn to shareholders by March 2019.

Apple has previously called for simplification of US tax rules, amid criticism of its large overseas cash holdings and investigation by US tax authorities.

The company's announcement of its planned investments comes as tech firms face questions from competition regulators, as well as calls to make devices less addictive.

Apple is also facing legal action over its deliberate slowing of older iPhones.

The firm reported nearly $230bn in sales and more than $48bn in profit for the 12 months ended 30 September.