Microsoft avoids paying tax in many countries

A study conducted by The Center for Corporate Tax Accountability and Research has alleged that the tech giant Microsoft has evaded billions in taxes in Britain, Australia, and New Zealand—all nations where it has lucrative public sector contracts—due to its complex organisational structure.

Cictar said that the corporation, which maintains that it complies with local rules and regulations wherever it operates, was depriving the public purse of much-needed funds while receiving the taxpayer’s money.

A study conducted by The Center for Corporate Tax Accountability and Research has alleged that the tech giant Microsoft has evaded billions in taxes in Britain, Australia, and New Zealand—all nations where it has lucrative public sector contracts—due to its complex organisational structure.

Cictar said that the corporation, which maintains that it complies with local rules and regulations wherever it operates, was depriving the public purse of much-needed funds while receiving the taxpayer’s money.

Another instance is Microsoft Singapore Holdings, which reported $22.4 billion in dividend profits in 2020 but only $15 in tax obligations.

Tech giant Microsoft has avoided billions in taxes in Britain, Australia and New Zealand, all countries where it has lucrative public sector contracts, because of its complex corporate structure, a study published Thursday claimed.

The company, which insists it respects local laws and regulations everywhere it operates, was starving the public purse of much-needed revenue while receiving taxpayer cash, the Center for Corporate Tax Accountability and Research said.

“In many cases, Microsoft has paid zero tax in recent years by moving profits to companies tax-domiciled in Bermuda and other well-known tax havens,” Cictar said in a statement.

According to the study, Microsoft Global Finance an Irish subsidiary that has tax resident status in Bermuda — consolidated more than $100 billion in investments and, despite an operating profit of $2.4 billion, paid no tax in 2020.

In another example, Microsoft Singapore Holdings posted profits from dividends of $22.4 billion in 2020 but announced a tax liability of just $15.

“Microsoft boasts of profit margins of over 30 percent to its shareholders. Yet, in the UK, Australia and New Zealand, filings show returns of three to four percent,” said Jason Ward, an analyst with the organisation.

“It does not seem credible that these wealthy markets are underperforming so dramatically,” he said, calling “this type of discrepancy… a huge red flag for tax avoidance”.

“Microsoft starves the public sector of much needed revenues” while it “makes billions as a government contractor, with contracts at all levels of government and in virtually every country”, Cictar said.

According to the report, Microsoft has entered into public contracts worth at least $3.3 billion over the last five years in Canada, the United States, Australia, and Britain.

More than 80% of Microsoft’s total overseas income is “channelled through Puerto Rico and Ireland,” according to the study, and the company is under scrutiny by tax officials in the US as well as other nations, including Australia.

“In fiscal year 2021 and 2020, our foreign regional operating centres in Ireland and Puerto Rico,” Microsoft said in its 2021 annual report

When contacted by the report’s authors, Microsoft stated that it adhered to “all local rules and regulations” in the nations in which it conducts business. WioNews