Friday, September 21, 2012

Microsoft, HP avoided paying billions in taxes...

A U.S. Senate committee memo said Microsoft Corp. (MSFT) used aggressive international tax maneuvers to avoid billions of dollars in taxes over the past three years.

The committee memo, released for a hearing today in Washington, said Microsoft used transactions with subsidiaries in Puerto Rico, Ireland, Singapore and Bermuda to save at least $6.5 billion in taxes. The committee also revealed that Hewlett- Packard Co. (HP) has used a series of short-term internal loans that allowed the company to tap its offshore cash for domestic operations without paying taxes, according to the memo.

Senator Carl Levin, a Michigan Democrat and chairman of the Permanent Subcommittee on Investigations, didn’t accuse the companies of acting illegally, though he said he was “highly dubious” that HP was in compliance with the tax law.

Such financial maneuvers “may be in your temporary interest as a corporation,” Levin told Bill Sample, Microsoft’s corporate vice president for worldwide tax, at the hearing. “It increases your profits and reduces your taxes, but there’s a heavy cost to the United States,” Levin said. Full story...

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