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Microsoft avoids $30billion in taxes by keeping $93billion offshore
Started:August 23rd, 2014 (10:33 AM) by kbit Views / Replies:171 / 0
Last Reply:August 23rd, 2014 (10:33 AM) Attachments:0

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Microsoft avoids $30billion in taxes by keeping $93billion offshore

Old August 23rd, 2014, 10:33 AM   #1 (permalink)
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Microsoft avoids $30billion in taxes by keeping $93billion offshore

Microsoft has revealed that it keeps $92.9billion 'permanently reinvested outside the U.S.' - meaning it has not paid $29.6billion in taxes.

The tech company said in a SEC filing 'As of June 30, 2014, we have not provided deferred U.S. income taxes or foreign withholding taxes on temporary differences of approximately $92.9 billion resulting from earnings for certain non-U.S. subsidiaries which are permanently reinvested outside the U.S.'

Microsoft noted that 'The unrecognized deferred tax liability associated with these temporary differences was approximately $29.6 billion at June 30, 2014.'

Those figures were first noted in a report by The International Business Times.

'The amount of money that Microsoft is keeping offshore represents a significant spike from prior years, and the levies the company would owe amount to almost the entire two-year operating budget of the company’s home state of Washington,' the website reported.

In June, a Citizens for Tax Justice (CTJ) report indicated that Microsoft heavily relies on tax shelters.

'Microsoft reported operating 10 subsidiaries in tax havens in 2007 in 2013, it disclosed only five,' the report said. 'During this same time period, the company increased the amount of money it held offshore from $6.1 billion to $76.4 billion in U.S. taxes. That implies that the company pays a tax rate of just 3 percent to foreign governments on those profits, suggesting that most of the cash is booked to tax havens.'

That report cited other companies that allegedly use tax shelters, some of which reportedly include Apple, General Electric, Pfizer, Johnson & Johnson, Google and Exxon Mobil.

The Senate's Permanent Subcommittee on Investigations explained in a 2012 report that Microsoft uses locations in Singapore, Puerto Rico, Bermuda and Ireland to handle its funds.

MailOnline's request for comment to Microsoft was pointed toward testimony from Bill Sample, who appeared in front of the subcommittee - not unlike a request from The International Business Times.

At the time, Sample said 'Microsoft's tax results follow from its business, which is fundamentally a global business that requires us to operate in foreign markets in order to compete and grow. In conducting our business at home and abroad, we abide by US and foreign tax laws as written. That is not to say that the rules cannot be improved--to the contrary, we believe they can and should be.'

Sample's testimony also criticized the US tax system, including 'U.S. international tax rules,' corporate tax and residual tax.

'We believe the U.S. should reform its tax rules to support the ability of American businesses to compete in global markets and invest in the U.S.,' Sample said at the time.

Microsoft avoids $30billion in taxes by keeping $93billion offshore | Mail Online

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