23 August 2014

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Microsoft admits keeps $93Billion offshore avoids $30Billion in taxes

Microsoft admits keeps $93Billion offshore avoids $30Billion in taxes

Microsoft said in a 2014 filing it keeps $92.9billion in funds 'permanently reinvested outside the US' This means that Microsoft  has not paid $29.6billion in taxes.

A Senate report said in 2012 Microsoft used offices in Singapore, Puerto Rico, Bermuda and Ireland for tax purposes

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.'

The news was first reported by The International Business Times.

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

Ibttimes reported that the Microsoft company says it has "not provided deferred U.S. income taxes" because it says the earnings were generated from its "non-U.S. subsidiaries” and then "reinvested outside the U.S.” Tax experts, however, say that details of the filing suggest the company is using tax shelters to dodge the taxes it owes as a company domiciled in the United States.

according to a 2012 U.S. Senate investigation, the company has in recent years used its offshore subsidiaries to substantially reduce its tax bills.

The panel’s report noted that “despite the [company’s] research largely occurring in the United States and generating U.S. tax credits, profit rights to the intellectual property are largely located in foreign tax havens.” The report discovered that through those tax havens, “Microsoft was able to shift offshore nearly $21 billion (in a 3-year period), or almost half of its U.S. retail sales net revenue, saving up to $4.5 billion in taxes on goods sold in the United States, or just over $4 million in U.S. taxes each day.”

U.S. Sen. Carl Levin, D-Mich., said at the time: “Microsoft U.S. avoids U.S. taxes on 47 cents of each dollar of sales revenue it receives from selling its own products right here in this country. The product is developed here.
It is sold here, to customers here. And yet Microsoft pays no taxes here on nearly half the income.”

Apple and General Electric, which also employ offshore subsidiaries, are the only U.S.-based companies that have more money offshore than Microsoft, according to data compiled by Citizens for Tax Justice.

We must understand this problem, if someone is not ready to pay taxes to his own country then do you think that company or person will pay the taxes to other country?

Suggested Reading –

Microsoft Admits Keeping $92 Billion Offshore to Avoid Paying $29 Billion in U.S. Taxes

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Saturday, August 23, 2014

Tags – Microsoft offshore Money


DWei August 23, 2014  

While very illegal and devious I think it's pretty clever.