In the United Kingdom, Australia or New Zealand: Thanks to a complex structure, US computer giant Microsoft avoids paying billions of dollars in taxes in countries with lucrative public contracts, according to a study published this Thursday.
“Microsoft has paid no tax in recent years while shifting profits to companies in Bermuda and other tax havens, in many cases,” said the Center for International Corporate Tax Responsibility and Research (Sictor), a Bermuda-based think tank. and other tax havens. In Australia.
“Microsoft prides itself on delivering profit margins of over 30% to its shareholders. However, in the UK, Australia and New Zealand, it has only returned 3% to 4%,” asked an analyst at the centre. Jason Ward, quoted in a statement.
“Such weak yields in these prosperous markets do not seem credible,” he said, adding that it was “a huge warning sign of tax evasion” that “loses much-needed revenue to the public sector, despite earning billions as a provider”. Governments of those countries.
According to the study, Microsoft Global Finance, an Irish subsidiary with Bermuda tax residency status, focused more than $100 billion in investments and paid no tax in 2020 despite its operating income of $2.4 billion.
Another example cited by Sichter is Microsoft Singapore Holdings, which reported its 2020 dividend income of $22.4 billion, but reported a tax burden of $15.
Over the past five years, Microsoft has signed public contracts worth at least $3.3 billion in the UK, US, Australia and Canada. The center points out that the company is being investigated by tax authorities in other countries, including the United States and Australia, and that “more than 80% of its total foreign income is funneled through Puerto Rico and Ireland.”
“In fiscal 2021 and 2020, our regional overseas operating centers in Ireland and Puerto Rico, which are taxed below the U.S. rate, generated 82% and 86% of our pre-tax overseas income,” Microsoft said in its statement. 2021.
As requested by the report’s authors, Microsoft pledged to respect “all local laws and regulations” in countries where it operates.
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