In billions of dollars, how does Microsoft avoid paying taxes?

Microsoft has not paid any taxes in recent years by shifting profits to companies based in Bermuda and other tax havens.

Thanks to a complex structure, the US computer giant Microsoft Group "avoids paying billions of dollars" of taxes in countries where it has concluded lucrative public contracts, such as Britain, Australia and New Zealand, a study published Thursday revealed.

"In many cases, Microsoft has not paid any tax in recent years by shifting profits to companies based in Bermuda and other tax havens," the Australia-based Center for Accounting and Research on International Corporate Tax said in a statement.

Jason Ward, an analyst at the Institute of Studies, expressed his astonishment because "Microsoft boasts that it offers profit margins of more than 30% to its shareholders, even though it is talking about imports that do not exceed 3% or 4% in the United Kingdom, Australia and New Zealand," as the statement quoted.

He added, "It does not seem reasonable that the performance of these booming markets is so weak," considering this a "massive indicator of tax avoidance."

He stated that this "deprives the public sector of much-needed income" despite "billions of profits as a source of supply for the governments of these countries."

The study said that "Microsoft Global Finance", an "Irish subsidiary" with tax resident status in the Bermuda Islands, has invested more than 100 billion dollars, and despite the profits of investments amounting to "2.4 billion dollars", the technology giant did not pay any taxes in 2020. .

The other example mentioned in the study is Microsoft Singapore Holdings, the company's branch in "Singapore", which announced in 2020 profits of "22.4 billion dollars", and in return it paid only 15 dollars in tax.

In the past five years, Microsoft has concluded "general contracts" amounting to at least $.3 billion in the United Kingdom, the United States of America, Australia and Canada, according to the data contained in the study.

The center pointed out that Microsoft is subject to "investigations" by tax departments in the United States and other countries, especially in Australia, explaining that "more than 80% of its total foreign exchange income passes through Puerto Rico and Ireland."

"In fiscal year 2021 and 2020, our foreign regional operating centers in Ireland and Puerto Rico, which are subject to tax rates below the US average, generated 82 percent and 86 percent of our foreign pre-tax income," Microsoft wrote in its 2021 annual report.

In a call to the report's authors, Microsoft said it respects "all local laws and regulations" in the countries in which it operates.