Microsoft Corp was identified by Reuters as having been ordered to pay more than US$150 million in what authorities describe as a push to rein in cross-border tax evasion.
Reuters was able to identify the software maker based on a report from Xinhua news agency on Sunday, which described the targeted company as a wholly owned foreign subsidiary established in 1995 in Beijing that is one of the world’s 500 biggest corporations and has a name that starts with “M.”
Microsoft is the only company that fits the description, Reuters reported on Tuesday, after the South China Morning Post said Microsoft opened its Beijing unit in 1995.
Microsoft could not confirm whether it was the firm described in the Xinhua report, the Redmond, Washington-based maker of Windows software and Xbox game systems said in an e-mailed statement.
The case, which Xinhua said was the biggest since China last year joined an international program targeting tax evasion, comes amid a series of regulatory and law enforcement actions against foreign companies operating in the nation.
Global car manufacturers, food companies and technology companies, including Microsoft, have faced antitrust probes in recent months, leading industry groups to complain of unfair treatment.
Microsoft said in the statement that it operates in China under an agreement with the tax authority.
“In 2012, the tax authorities of China and the US agreed to a bilateral advanced pricing agreement with regards to Microsoft’s operations in China,” Microsoft said in the statement. “China receives tax revenue from Microsoft consistent with the terms of the agreed advanced pricing agreement.”
In July, China’s State Administration for Industry and Commerce said it began probing whether Microsoft’s Windows operating system and Office software violate China’s anti-monopoly law.
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