(13 October 2022) A new report finds that Microsoft uses a global network of subsidiaries to avoid paying taxes.
The report, published by the Centre for International Corporate Tax Accountability and Research (CICTAR) traces billions of dollars in financial flows between hollow companies which claim tax residency in countries such as Luxembourg, Ireland and the Netherlands.
By engaging in convoluted tax avoidance procedures, Microsoft is deliberately avoiding contributing to the public services on which its workforce and customers rely on. Moreover, Microsoft earns significant profit from public services in the form of government contracts across all levels of public administration and in virtually every country. By shifting profits from the countries where Microsoft genuinely operates, public services are deprived of badly needed revenue streams.
CICTAR’s new report highlights the complex nature of Microsoft’s creative corporate structures and highlights many serious examples, including an extensive use of dummy subsidiaries in Ireland. The findings make a strong argument for governments to demand transparent reporting of revenues and tax payments when awarding contracts.