Microsoft Report Shows 40% of Pretax Income Landed in Ireland Under EU Disclosure Rules
Updated
Updated · The New York Times · Jul 3
Microsoft Report Shows 40% of Pretax Income Landed in Ireland Under EU Disclosure Rules
2 articles · Updated · The New York Times · Jul 3
Summary
Microsoft’s new country-by-country filing showed nearly 40% of its pretax income in Ireland, even though about 3% of its global workforce was based there.
The report, released to comply with a new EU directive, offered a rare public look at how a major U.S. tech company books high returns in low-tax jurisdictions while reporting thin margins in higher-tax countries.
Germany, Europe’s largest economy, accounted for barely 0.5% of Microsoft’s global profits, and excluding Ireland the company said Europe generated less than 2% of its worldwide pretax earnings.
Microsoft said it obeys tax laws in every jurisdiction and argued the reporting standards create some inconsistencies, while the disclosure sharpened scrutiny of how multinationals cut tax bills by shifting profits across subsidiaries.