Microsoft Avoids Taxes in Many Countries (Study)

Posted by: 13/10/2022 – 02:16Changed: 10/13/2022 – 02:14

“In several cases, Microsoft has not paid taxes in recent years by shifting profits to companies resident in Bermuda and other tax havens,” the Center for Corporate Tax Research and Accountability said in a statement. (Sictor), an Australia-based research firm.

“Microsoft boasts of delivering profit margins of over 30% to its shareholders. Yet in the UK, Australia and New Zealand, (the company) returns 3-4%,” marveled company analyst Jason Ward. In a press release.

“It’s unbelievable that these thriving markets are performing so poorly,” he adds, adding that it’s “a huge red flag for tax evasion,” which is depriving “the public sector of much-needed revenue. Billions earned as a supplier to these countries’ governments.”

Microsoft Global Finance, an Irish subsidiary that is tax domiciled in Bermuda, focused more than $100 billion in investments and paid no tax in 2020 despite an operating profit of $2.4 billion, according to the study.

Another example cited by Siktor is Microsoft Singapore Holdings, which announced that its 2020 profit comes from $22.4 billion in dividends, but only $15 will be taxed.

However, according to data from this study, Microsoft has concluded public contracts in the United Kingdom, United States, Australia or Canada worth at least $3.3 billion over the past five years.

The company points out that Microsoft is under investigation by tax authorities in the US and other countries, particularly Australia, and that “more than 80% of its total foreign income goes through Puerto Rico and Ireland”.

“In fiscal 2021 and 2020, our overseas regional operating centers in Ireland and Puerto Rico, which are taxed at rates below the U.S. rate, generated 82% and 86% of our pre-tax overseas income,” Microsoft said in its 2021. Annual report.

Contacted by the report’s authors, Microsoft confirmed that it respects “all local laws and regulations” in countries where it operates.

© 2022 AFP