Microsoft Stockpiles $150 Billion In Tax Havens After Dodging Paying Taxes In Australia
At a recent Senate hearing Microsoft admitted that they engaged in tax minimisation using schemes to shovel revenue and profits out of Australia so that they could avoid paying taxes.
This is the same Company that wants to use Australian infrastructure, services and resources to do business but not invest in the development of that infrastructure.
A proposal was recently put to Prime Minister Tony Abbott that the Federal Government stops buying from Companies that openly operate schemes to minimise paying tax in Australia.
Microsoft’s Bill Sample, who flew in from the US to represent the company at the recent Senate hearing, said $2 billion worth of software sales generated in Australia is billed to Singapore.
Now it’s been revealed that Microsoft’s stockpile of offshore profits rose to $154 billion, with a 17 percent increase over the past year as the company continues reaping profits out of Countries like Australia by using questionable schemes that the Federal Government is now investigating.
The company crossed the $150 billion mark, making it just the second U.S. corporation — after General Electric to do so, according to a securities filing July 31.
Microsoft don’t even want to pay tax in the USA.
What’s keeping Microsoft’s cash abroad is the U.S. tax code. The company would be required to pay the difference between its foreign taxes and the 35 percent U.S. corporate tax rate if it brought the money home.
To get its $108.3 billion back, Microsoft would have to pay the U.S. $34.5 billion in taxes. That equals a 31.9 percent rate, which suggests that the company has paid as little as 3.1 percent in taxes on its foreign income, because of operations in low-tax Ireland, Singapore and Puerto Rico.
The Internal Revenue Service and Microsoft are in the midst of an intense legal battle over the company’s transfer pricing, or intracompany transactions. The federal government is auditing the company’s returns as far back as 2004, and Microsoft has challenged the government’s hiring of outside lawyers.
Microsoft, has declined to comment.