One of Microsoft’s Irish subsidiary – Microsoft Round Island One – reported $315 billion in profit in the fiscal year ending in June 2020, but it didn’t pay any dollars into IRC because it was based in Bermuda. being able to.
The subsidiary’s earnings represent nearly three-quarters of Ireland’s gross domestic product (about US$437 billion), despite the fact that it is a company with no workers other than directors.
This subsidiary collects license fees for use of Microsoft’s copyrighted software. The reported earnings compare to less than $10 billion in the previous fiscal year.
Microsoft Round Island One has its official title as a law firm with offices in Dublin, and as its last fiscal year tax return explains, “Because it is a tax resident in Bermuda, there is no tax on profits.” Bermuda does not charge a business tax.
The Guardian adds that the subsidiary paid a dividend of $24.5 billion to the parent company (Microsoft Corp) for the fiscal year in question, followed by distributing special dividends to shareholders of an additional $30.5 billion.
This news specifically comes on the eve of the meeting of the finance ministers of the Group of Seven major industrialized countries, on Friday and Saturday, in London, at a meeting in which they believe that they can reach an agreement on the establishment of a global minimum corporate income tax rate to mitigate tax evasion and corporate tax planning.
The US administration, led by President Joe Biden, is spearheading the creation of a corporate tax floor to combat “dumping” practices. Ireland is one of the countries of the European Union that has a more favorable system for multinational corporations, which has been able to concentrate the profits obtained in other jurisdictions there and benefit from a reduced tax burden.
According to the Guardian, the US Senate has previously investigated Microsoft’s practices in Ireland. The American tech giants known as the “Big Six” (Microsoft, Amazon, Facebook, Alphabet, Netflix and Apple) have already been accused of paying $96 billion less in taxes over the past decade than they would have been in calculating the transaction numbers involved.