People walk in front of a branch of U.S. technology company Apple in Zurich, Switzerland April 5, 2016. REUTERS/Arnd Wiegmann
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A loophole in the new U.S. tax law could allow multinational corporations like Apple Inc. avoid paying billions of dollars in taxes on profits stashed overseas, according to experts. Stemming from a Republican overhaul of international business taxes, the loophole involves the tax rates – 15.5 percent or 8 percent – that companies must pay on $2.6 trillion in profits they are holding abroad.The benchmark is a company's foreign cash position, calculated as the greater of either the average of the past two tax years, or the cash balance at the end of the last tax year begun before Jan. 1, 2018 .Companies would pay the 15.5 percent rate on sums up to the calculated foreign cash position.The new law says transactions meant principally to reduce taxes due on foreign profits can be disregarded by U.S. tax authorities.
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