Microsoft pays very little tax in several countries despite juicy public contracts

In the United Kingdom, Australia or New Zealand, the American computer giant Microsoft avoids, thanks to a complex structure, paying taxes on billions of dollars in countries where it nevertheless holds lucrative public contracts, according to a study published Thursday, October 13. “In many cases, Microsoft has paid no tax in recent years by shifting profits to companies domiciled in Bermuda and other tax havens,” the Center for Corporate Tax Research and Accountability said in a statement. (Cictar), a research firm based in Australia.

“Microsoft boasts of offering profit margins of over 30% to its shareholders. Yet in the UK, Australia and New Zealand, (the company) reports returns of 3-4%” only, is astonished Jason Ward, analyst of the firm, quoted in the press release. “It doesn’t seem credible that these thriving markets are showing such poor performance,” he adds, seeing it as “a huge red flag of tax avoidance,” which “deprives the public sector of much-needed revenue. need”, despite the “billions earned as a supplier to the governments” of these countries.

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According to the study, Microsoft Global Finance, an Irish subsidiary that is tax resident in Bermuda, centralized more than $100 billion in investments and, despite operating profit of $2.4 billion, n paid no tax in 2020. Another example cited by Cictar, Microsoft Singapore Holdings reported 2020 earnings from dividends of $22.4 billion, but announced a tax burden of only $15. Microsoft has however concluded these last five years of public contracts whose amounts amount to at least 3.3 billion dollars in the United Kingdom, United States, Australia or Canada, according to the data of this study.

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The firm points out that Microsoft is the subject of investigations by the tax services in the United States and in other countries, in particular in Australia, and that “more than 80% of its total foreign income passes through Puerto Rico and Ireland “. “In fiscal 2021 and 2020, our foreign regional operating centers in Ireland and Puerto Rico, which are taxed at rates below the U.S. rate, generated 82% and 86% of our pre-tax foreign income,” it said. thus Microsoft in its 2021 annual report. Contacted by the authors of the report, Microsoft ensured compliance with “all local laws and regulations” in the countries where it operates.