Technology giant Microsoft Corp has avoided billions in taxes in the UK, Australia and New Zealand, all places where it has lucrative public-sector contracts, because of its complex corporate structure, a study published yesterday 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 International Corporate Tax Accountability and Research (CICTAR) 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.
Photo: Bloomberg
According to the study, Microsoft Global Finance ULC — an Irish subsidiary that has tax resident status in Bermuda — consolidated more than US$100 billion in investments and, despite an operating profit of US$2.4 billion, paid no tax in 2020.
In another example, Microsoft Singapore Holdings Pte posted profits from dividends of US$22.4 billion in 2020, but announced a tax liability of just US$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 3 to 4 percent,” said Jason Ward, a CICTAR analyst.
“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.
In the past five years, Microsoft has signed public contracts worth at least US$3.3 billion in the UK, the US, Australia and Canada, the study said.
Microsoft is under investigation by tax authorities in the US and other nations, including Australia, and “more than 80 percent of its total foreign income is channeled through Puerto Rico and Ireland,” the report said.
“In fiscal year 2021 and 2020, our foreign regional operating centers in Ireland and Puerto Rico, taxed at rates lower than the US rate, generated 82 percent and 86 percent of our foreign income before tax,” Microsoft said in last year’s annual report.
Contacted by the report’s authors, Microsoft said it respected “all local laws and regulations” in the nations where it operates.
“We serve customers in countries all over the world and our tax structure reflects that global footprint,” the company said in a statement.
Mercuries Life Insurance Co (三商美邦人壽) shares surged to a seven-month high this week after local media reported that E.Sun Financial Holding Co (玉山金控) had outbid CTBC Financial Holding Co (中信金控) in the financially strained insurer’s ongoing sale process. Shares of the mid-sized life insurer climbed 5.8 percent this week to NT$6.72, extending a nearly 18 percent rally over the past month, as investors bet on the likelihood of an impending takeover. The final round of bidding closed on Thursday, marking a critical step in the 32-year-old insurer’s search for a buyer after years of struggling to meet capital adequacy requirements. Local media reports
US sports leagues rushed to get in on the multi-billion US dollar bonanza of legalized betting, but the arrest of an National Basketball Association (NBA) coach and player in two sprawling US federal investigations show the potential cost of partnering with the gambling industry. Portland Trail Blazers coach Chauncey Billups, a former Detroit Pistons star and an NBA Hall of Famer, was arrested for his alleged role in rigged illegal poker games that prosecutors say were tied to Mafia crime families. Miami Heat guard Terry Rozier was charged with manipulating his play for the benefit of bettors and former NBA player and
The DBS Foundation yesterday announced the launch of two flagship programs, “Silver Motion” and “Happier Caregiver, Healthier Seniors,” in partnership with CCILU Ltd, Hondao Senior Citizens’ Welfare Foundation and the Garden of Hope Foundation to help Taiwan face the challenges of a rapidly aging population. The foundation said it would invest S$4.91 million (US$3.8 million) over three years to foster inclusion and resilience in an aging society. “Aging may bring challenges, but it also brings opportunities. With many Asian markets rapidly becoming super-aged, the DBS Foundation is working with a regional ecosystem of like-minded partners across the private, public and people sectors
BREAKTHROUGH TECH: Powertech expects its fan-out PLP system to become mainstream, saying it can offer three-times greater production throughput Chip packaging service provider Powertech Technology Inc (力成科技) plans to more than double its capital expenditures next year to more than NT$40 billion (US$1.31 billion) as demand for its new panel-level packaging (PLP) technology, primarily used in chips for artificial intelligence (AI) applications, has greatly exceeded what it can supply. A significant portion of the budget, about US$1 billion, would be earmarked for fan-out PLP technology, Powertech told investors yesterday. Its heavy investment in fan-out PLP technology over the past 10 years is expected to bear fruit in 2027 after the technology enters volume production, it said, adding that the tech would
RSS