U.S. Senate says Microsoft and HP evaded paying millions in taxes
According to research by a subcommittee of the U.S. Senate, Microsoft, Hewlett-Packard and other large companies took advantage of some ambiguities in the law to avoid paying billions of dollars in taxes to the country.
The document states that Microsoft used transactions with subsidiaries in Puerto Rico, Ireland, Singapore and Bermuda to save “at least” $6,500 million USD in taxes. Meanwhile, HP created in 2008 a series of short-term domestic loans that allowed the company to use the money I had abroad for domestic operations without paying the tax that should be canceled when committing the money from abroad.
“U.S. corporations are increasingly generating their profits here, but sending them abroad to avoid paying the taxes they owe. At a time when we face difficult budget decisions, and when American families are facing tax increases and cuts in critical programs, from education to health inspections and national defense power, these conspiracies are unacceptable, “said Sen. Carl Levin.
Microsoft defended itself by ensuring that it has complied with the rules “in each jurisdiction in which it operates” and paying “billions of dollars in total taxes,” but added that the United States should simplify its rules for payment of taxes.
“In our view, the international tax rules are outdated and the United States are not competitive with the tax systems of our major trading partners. These rules often provide a disincentive for investment in the United States. The country now has the highest tax rate in the OECD countries, and unlike our major business partners, collects taxes on profits of domestic firms overall, “said William J. Sample, a vice president at Microsoft.
Moreover, HP would have kept most of their money in foreign currency. In 2009, HP was USD $12,500 million in foreign currency store, and only $800 million in U.S. dollars, paying tax only on that portion.economic crisis, HP, Microsoft, money, Senate, Taxation, U.S.