Tax row turns to Microsoft over £1.7bn of online revenues

[dutchman]

The row over the amount of tax multinationals are paying has taken another turn after it emerged that Microsoft pays no UK tax on £1.7bn of online revenues.



The US technology group is understood to be channelling online payments for its Windows 8 operating system and other downloads of software through Luxembourg and Ireland, where corporation tax is lower than the UK.

This means that Microsoft’s Irish registered company, Microsoft Ireland Operations Ltd, has reported £1.7bn of revenues from the UK on which the company has paid no UK corporation tax.

Microsoft said on Sunday night: “Microsoft pays all due taxes, as required by law, worldwide. Microsoft subsidiaries are fully subject to tax in the jurisdictions in which we operate.

“We are regularly audited by major tax jurisdictions, which ensure the company is complying with all rules and regulations.”

Microsoft pays corporation tax in the UK on other parts of its business, including marketing.

Microsoft has already been criticised for the amount of tax it pays in the US.

A Congressional investigation earlier this year designed to highlight the ­loopholes in America’s tax code claimed that Microsoft, the world’s largest software company, shielded its profits from at least $6.5bn (£4.1bn) of taxes through a series of transactions with foreign ­subsidiaries in countries with low tax rates, such as Ireland, Singapore and Puerto Rico.

Carl Levin, the senator who chairs the committee, said: “These loopholes and abuses exact a tremendous cost. What these gimmicks do is shift the burden of taxes on to citizens and businesses who don’t use armies of lawyers and ­accountants.”

Microsoft has denied any wrongdoing in the US and said that it complies with tax laws.