Jul 30, 2011

With the shortcomings of the tax, Microsoft does not help broke Government much

Despite solid gains, Microsoft is not help many with the problem of deficit of the Government of the United States - only 7 per cent of the software giant before profits went to the IRS and agencies of foreign taxes for last quarter, Reuters reports.

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Microsoft has reported only $ 445 million in taxes on 6.32 billion pre-tax profit in the fourth quarter of its fiscal year 2011 – 1,06 billion less in taxes than the previous year. And while it's great for Microsoft, and perhaps the economy of the ecosystem of Microsoft of the State of Washington, which is not ideal for a Federal Government try to balance its budget and reduce debt.

Reuters called the tax result "attractive." To report:

This is partly because the company had a one-time refund of 461 million from the IRS for overpayments earlier and because of her quadruplets in the rate of taxation in previous quarters. There may be an increase in sales of products to consumers abroad, although it is not clear disclosures of company how much of a factor perhaps.

But Microsoft is simple on the main reason why his tax bill lower: she is more channel gains from the sale to customers around the world through the taxation low paradise of the Ireland, Puerto Rico and Singapore.

It is well reported that Microsoft - as the other tech companies like Google - using overseas tax loopholes. Strategies, called dual Irish and Dutch Sandwich because of a loophole through the Netherlands, are used primarily by technology companies and cost of the United States up to $ 60 billion in annual tax revenue of last year, Bloomberg News announced in May 2010.

This April, the beast daily named Microsoft and Boeing among the 15 top tax-dodgers nation. And in June, Microsoft was among the business tech requesting the Government of the United States tax holiday year-long.

This is more than long Reuters report, which is certainly worth a full read:

Tax rate in the world of Microsoft dropped to 17.5% in the last year of 25% the previous year and 31 percent the year to June 30, 2006. The company said it expects to have tax at an effective rate of the following year between 19 and 22%.

Few firms, including Thomson Reuters, pay the corporate rate of American standard of 35%, with the shortcomings and deductions, but the Microsoft tax rate is still at large low compared to other technology companies.

What do you think? Obviously, the lower tax rates are good for Microsoft and its shareholders, but is it good for the economy and society?

Visit the Microsoft blog index for more news from Microsoft and new technologies and seattlepi.com to follow News in Seattle.

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