14 DAY TRIAL // The tax watchdog in France wants Microsoft to pay no less than 600 million euros ($715 million) in back taxes, as the company has been using the subsidiary in Ireland for billing clients in the country.
A report from France24 reveals that France’s tax authority claims the country hasn’t received revenue on the transactions that Microsoft made locally, with all the sales channeled through Ireland. The software giant paid only 32.2 million euros in corporate tax in 2016, according to the cited source, despite being one of the largest tech companies in France.
Unsurprisingly, Microsoft does not agree with the claims and said in a statement that the company “acts in accordance with the laws and regulations in all the countries in which it operates, working in close cooperation with local tax authorities to ensure complete compliance with local laws.”
In other words, Microsoft says it’s not turning to any tax dodging schemes and what the company does is pay taxes as required by the local laws.
Google required to pay 1.1 billion euros
Search giant Google claimed the same thing earlier this year when it was accused by France of tax avoidance using the Ireland subsidiary. French tax investigators required Google to pay 1.1 billion euros in back taxes, though a local court ruled the search company can’t be forced to pay more in corporate tax due to its reduced presence in the country.
France has already appealed the decision and, according to the aforementioned source, the government is also seeking a settlement with Google.
Just like rival Google, Microsoft is very likely to fight the claims in court, with a favor ruling expected in this case as well. President Emmanuel Macron, however, has made it a priority to force technology giants to pay taxes for the sales they make in the country, and there’s no doubt the dispute between the government and foreign firms won’t stop here.