The American tax services are claiming $28.9 billion from Microsoft (or 27.2 billion euros), for amounts not paid between 2004 and 2013, as well as interest and penalties, according to a stock market document published Wednesday October 11 by the IT giant.
Microsoft announces in this same document that the group will contest the requests of the tax authorities (IRS) and that it could even initiate legal proceedings if necessary.
“It is important to note that the IRS appeal process will take several years and if we do not reach a direct agreement with the IRS, Microsoft will then have the opportunity to challenge the unresolved issues in court.”underlines Daniel Goff, the company’s vice-president, responsible for international tax issues.
He says the dispute concerns the distribution of his profits between countries and jurisdictions between 2004 and 2013. He estimates that the IRS failed to take into account up to $10 billion in taxes already paid by Microsoft.
“We believe that we have always (…) paid the taxes we owed in the United States and around the world”he insists.
212 billion dollars in turnover
The parent company of Windows and Xbox said the IRS claim was the result of decade-long discussions “to answer questions about how we allocated our income and expenses for tax years going back to 2004”.
Microsoft claims to have changed its approach since the audit. “Therefore, the issues raised by the IRS are relevant to the past, but not to our current practices”added the group. “Since 2004, we have paid more than $67 billion in taxes in the United States”he further specifies.
Asked by AFP, the American tax agency responded that it could neither confirm nor deny the existence of disputes.
Microsoft achieved $212 billion in revenue for its last annual fiscal year (ending June 30, 2023), of which it generated more than $72.4 billion in net profits.
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According to the stock market document, Microsoft considers its provisions for tax risks as “sufficient” at this stage.
“We do not expect a final resolution of these issues within the next 12 months. Based on currently available information, we do not anticipate a significant increase or decrease in our tax provisions for these matters over the next 12 months”specifies the technology group.