Microsoft accused of ‘game tax system’ by lobby group
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Lobbying groups say Microsoft has received less attention than some of its peers for its tax practices.
Microsoft has manipulated the global tax system through its extensive use of entities in Ireland and Bermuda, according to a report released in Australia by the multinational tax lobbying Center for International Tax Accountability and Planning (Cictar). increase.
Cictar principal analyst Jason Ward said that rather than accusing Microsoft of breaking the law, Microsoft’s arrangement is “standard practice for multinational corporations.”
But Microsoft has never faced the same level of scrutiny over aggressive tax planning as its competitors, even though it often benefited from large government contracts, he said. he said.
According to a Cictar report, Microsoft New Zealand is one of many subsidiaries that Microsoft operates around the world and is owned by an Irish entity called Microsoft Ireland Research. The company says he only paid $1.8 billion in taxes on $33.5 billion in royalty income in 2020.
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There is no evidence in Cictar’s report that Microsoft currently underpays tax in New Zealand, but Mr Ward said the low tax rate paid by Microsoft Ireland Research (MIR) meant the company benefited from New Zealand to the entity. He said he would give incentives to move.
“The tax charge for the MIR was significantly lower than Ireland’s already low statutory corporate tax rate of 12.5%,” the report said.
Cictar said 82% of Microsoft’s non-U.S. pre-tax profit in fiscal 2021 came from subsidiaries in Ireland and Puerto Rico, but Ward said those countries are where Microsoft develops most of its intellectual property. He said it wasn’t in the center it would have been.
The G7 has taken the reins to broker a new deal on multinational taxation (video first released in 2021).
Although a general principle of international taxation is that profits should be taxed where value is created, many countries offer tax incentives to companies that transfer legal ownership of intellectual property to their jurisdiction. We provide measures.
Cictar also said that Microsoft’s effective tax rate in the United States fell from 17% to 14% in 2020.
Noting that the Internal Revenue Service is currently conducting an audit of Microsoft, Robbie Group described it as one of the largest audits in the history of the tax authority.
Ward said Cictar, working with UK investment consultancy PIRC, submitted a shareholder resolution calling for “tax transparency” from Microsoft.
Microsoft has been approached and it is understood that comments are being prepared.
this Transferred ownership of New Zealand subsidiary USA to Luxembourg in 2015.
A Microsoft New Zealand spokesperson said at the time that the transfer of Microsoft New Zealand’s ownership to the Luxembourg business “has nothing to do with tax issues, but is part of an internal restructuring of Microsoft’s marketing subsidiary.” said.
Microsoft NZ ownership later A subsidiary of Microsoft based in Bermuda in 2017.
British charity Oxfam named Luxembourg and Bermuda among the “15 worst tax havens in the world” in a report released in 2016.
Microsoft will pay just under $25 million in back taxes. Resolution Dispute with New Zealand Inland Revenue 2019.
It followed a transfer pricing policy audit.
The settlement was one of many deals the Internal Revenue Service made with technology companies at the time.
new zealand Tax secrecy law This means that neither the exact cause of the dispute nor the terms of the settlement have been scrutinized by anyone other than the Internal Revenue Service.
https://www.stuff.co.nz/business/130153337/microsoft-accused-by-lobby-group-of-gaming-tax-system.html Microsoft accused of ‘game tax system’ by lobby group