Tech giant Microsoft has avoided billions in taxes in Britain, Australia and New Zealand, all countries where it has lucrative public sector contracts, because of its complex corporate structure, a study published Thursday claimed, IgbereTV reports
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 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.
According to the study, Microsoft Global Finance — an Irish subsidiary that has tax resident status in Bermuda — consolidated more than $100 billion in investments and, despite an operating profit of $2.4 billion, paid no tax in 2020.
In another example, Microsoft Singapore Holdings posted profits from dividends of $22.4 billion in 2020 but announced a tax liability of just $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 three to four percent,” said Jason Ward, an analyst with the organisation.
“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 $3.3 billion in Britain, the United States, Australia and Canada, according to the study
