Microsoft filing shows how it shifts profits around to reduce its European tax bill
Key takeaways
- A new compliance report shows the disconnect between where it makes its money, and where it pays its taxes.
- Following pain caused by the global financial crisis of 2008, Europe passed a directive in 2021 requiring corporations to submit public country-by-country reports.
- Microsoft's report shows a clear disconnect between the two.
A new compliance report shows the disconnect between where it makes its money, and where it pays its taxes.
Frantic00/Getty Images. A new mandatory compliance report released by Microsoft shows how it declares profits in different European nations to reduce its tax bill, The New York Times reports. The document reveals that the software giant reports high income in regions where taxes are low and reduced profits in countries where rates are higher. Microsoft may be the first tech giant to submit such a report and it's likely that others follow the same tax-haven recipe.
Following pain caused by the global financial crisis of 2008, Europe passed a directive in 2021 requiring corporations to submit public country-by-country reports. The aim was glean insight on where companies claim to earn their money for tax purposes versus their actual economic activities.