Unlock eSignature Legitimateness for Retail Trade in European Union

How to eSign a document: e-signature legitimateness for Retail Trade in European Union

apple is currently holding 191.83 billion dollars in cash and that's seven percent lower than the previous year where they held well over 200 billion dollars in cash similarly microsoft is holding on to 137.98 billion google is holding on to 121.08 billion and amazon is holding on to 71.77 billion unlike many of their founders these companies are not only rich on paper but actually rich in paper this begs the question though where in the world are these companies stashing so much cash and how do they ensure its safety [Music] well for the longest time apple will store most of the money in ireland in order to take advantage of the tax benefits in ireland it wasn't just apple either ireland has been one of the most popular choices for tech companies since the 1980s but how are these companies even sending tens of billions if not hundreds of billions to ireland on an annual basis without any lawmakers noticing or taking action well the thing is these companies aren't using dark portraiting or secret swiss bank accounts or anything like that tech companies send it over in broad daylight and lawmakers are very much aware of this in fact this loophole is so popular that it even has its own name the double irish with the dutch sandwich despite this lawmakers can't do anything about it as the entire process is sketchy but nonetheless completely legal with that being said let's take a look at how apple approaches the matter the first step is opening an hq or manufacturing plant in the desired country in the case of apple they opened a manufacturing facility in the city of cork ireland way back in 1980 this isn't a shell company or just for the books location rather this is a legitimate manufacturing facility that eventually turned into apple's european headquarters today the location is home to 6 000 apple employees and without research and development logistics planning and other business matters do occur here where it gets sketchy is the amount of credit these guys claim we don't know the intricacies of how exactly apple structures their intellectual property but the general understanding is that an overweight amount of their intellectual property is stored in ireland let's take apple music for example apple europe may have legitimately helped in the development of about twenty percent of apple music so ideally twenty percent of the revenue from apple music should go to apple europe or all the revenue should go to apple north america as that is still the main headquarters instead though what apple might do is say that apple north america and apple europe split their work equally thus apple europe would get a 50 royalty on all revenue from apple music this way apple north america still gets plenty of revenue to cover all of their own costs and even turn a little bit of profit however the vast majority of the profit would go to apple europe as they end up receiving a disproportionate amount of the revenue this is extremely smart as it doesn't even look sketchy it's not like apple is claiming that apple europe did 100 of the work or anything outrageous like that apple's net income margin over the last 12 month period was 20.9 percent so really apple europe only needs a 10 or 15 royalty to legally claim most of the profit as you would guess this strategy has worked out phenomenally for apple for decades don't get too mad at apple though they have taken advantage of the strategy to lower their tax bill but they have continued to pay a decent amount in taxes in the last 12 month period they have given up 14.4 of their profit to taxes not all of that was paid to the us government but it was paid to governments around the world anyways i think you'll be pleased to hear that this loophole was just patched very recently given that this shenanigans has been going on for decades prosecutors have had ample time to think of clever ways to put an end to this they couldn't do anything about apple sending over their money but they could do something about ireland allowing for this you see not only were tech companies benefiting from sending money to ireland but so was ireland moving money to ireland simply means tech companies don't have to pay taxes to uncle sam but they still have to pay taxes to ireland though ireland was only receiving super low effective tax rates from these companies when you have all of the top tech companies shuffle into your country you're going to nonetheless make quite a bit of money with that being said the european commission would accuse ireland of essentially making favorable tax laws with the intent of drawing the attention of top tech companies the european commission would go on to win this battle which would successfully change the tax laws in ireland in 2015 legislation would pass that ban the use of ireland for any new tax schemes however companies that were already using it got until 2020 to stop using it aside from this the european commission would also demand that apple pay 15 billion in european taxes which is how much they apparently avoided last summer though apple would get this fine knocked off by basically claiming it's not our fault it's ireland's fault fortunately for apple not only were they able to slip out of that hefty tax bill but they didn't really mind keeping their profits in america apple was finally starting to pull in large profits as iphone sales skyrocketed in the early 2010s as a result apple was no longer in a rough financial position like in the late 1990s and early 2000s moreover apple was quite cash poor in the u.s which made it difficult for them to complete acquisitions buy back stock build new office spaces and so on the terry on top was that the corporate tax rate in the us would be decreased from 35 percent to 21 in 2017. as you can see apple was likely going to shift more of their profits to the us anyways since the change in irish tax policy apple has kept most of their cash within the u.s but they are still using the same loophole within the us they found an island near new jersey where there are no state corporate taxes and that's where they're currently sending and storing most of their money so that's the basics of how apple moves their massive cash pal around the world while paying the least amount of taxes but that still leaves one more question unanswered which is how they actually store the cash once they get it to where they want apple could split their cash amongst the top banks in the world as these banks have such large deposits that apple's 200 billion dollars wouldn't actually be that hard to handle for instance apple could select top of the 10 banks in the world like chase wells fargo and and store 20 billion dollars in each of them these guys often have trillions in deposits so even though apple's deposits wouldn't be fdic insured past 250 000 storing 20 billion in each of them wouldn't be that risky taking a look at apple's balance sheet though we'll see that they only hold a 38.016 billion out of their nearly 200 billion dollars in cash and cash equivalents cash and cash equivalents is the money that apple can come up with instantly they don't need to break any long-term interest plans or pull any strings to get this money this money is stored in corporate bank accounts around the world either in u.s dollars or the respective countries currency this can also be stored in the form of short-term bonds that expire within the next three months in other words 38.016 billion is the money that apple has in the checking account ready to be used to fund purchase orders pay salaries run marketing campaigns and so on and so forth as we all know though checking accounts offer no interest or nearly no interest so like any rational person apple chooses to keep the money that they don't plan on using within the next three months in something that offers less liquidity but greater returns which is marketable securities in total apple holds 153.814 billion in marketable securities split between current assets and non-current assets current assets are simply assets that can be liquidated within the next 12 months while non-current assets can only be liquidated within the next couple of years or even longer the most common type of marketable security is of course government bonds which is basically when a company or individual loans money to the government and the government will pay them back with interest over a set period of time considering that the government can just print money to pay you back government bonds are regarded as a zero risk investment it should be noted that the government has printed nine trillion dollars since september 2019 though so maybe they should scale back anyways though government bonds are super safe like bank accounts they don't offer very high rates today you're looking at a minimum of a 10-year maturity period to earn just one percent interest annually another popular type of marketable security is corporate bonds as the name suggests this is the same as a government bond but instead of loaning to the government you would be loaning into a company unlike the government though getting your money back is dependent on the financial well-being of the corporation you are loaning to because of this individuals like warren buffett are not the biggest fan of corporate bonds with that being said though loading to a company like amazon who might be in need of short or long term capital isn't that risky thus it's likely that apple takes advantage of corporate bonds which offer better interest rates than government bonds finally the last major type of marketable security is of course stock apple buys back tens of billions of dollars worth of their own stock every single year so they no doubt store a significant amount of their cash in the form of apple stock at the end of the day apple is a cash cow who has so much money that managing their money itself is an art over the years they took advantage of some loopholes storing most of their money in ireland but throughout the past couple of years they've decided to play it safe and keep it mostly within the us they simply keep their money in corporate bank accounts loan their money to strong governments and corporations and buy apple stock when they can and that's how apple manages their cash today what do you guys think about apple's massive stash comment that down below also drop a like if this video helped you understand the logistics of big money and of course consider joining our discord community to suggest future video ideas and consider subscribing to see more questions logically answered but until then i'm hari and i'll see you guys on the next one you