Microsoft China cross-border investigation was to pay $140 million in tax avoidance

NetEase Francisco November 26th message, according to foreign media reports, the Microsoft Corp has to pay $140 million in taxes to Chinese aspects. This is the first major Chinese in cross-border tax evasion ".

foreign media reports, China Xinhua News Agency on Sunday published an article, said a US multinational companies must pay 840 million yuan to Chinese government ($137 million) in taxes and interest, but after a year there will be more than 100 million yuan of tax.

this article mentioned in the name of the company, only with the letter "M", and says it is the world’s top 500 companies, and in 1995 in Beijing established a wholly owned subsidiary of the company. Microsoft is the only company that meets this description.

, headquartered in Raymond, Washington, Microsoft did not confirm the report, but it does not deny that he is someone’s company.

Microsoft spokesman said in an e-mail statement, China and the United States in 2012 on Microsoft’s operations in China signed a pre pricing bilateral agreement. China’s tax collected from Microsoft complies with the terms of the pre pricing agreement."

pre pricing agreement provides tax treatment for transfer pricing. Transfer pricing is a method of recording the sales and transaction prices between the subsidiaries of the company.

Microsoft has disclosed in 2014 annual report, the company’s overall effective tax rate of 21%. This tax rate is far lower than the average U.S. companies 35%. The main reason for this situation is that Microsoft will be from Ireland, Singapore, Puerto Rico and other countries or regions of the overseas regional operations center to the u.s..

Xinhua News Agency reported that the "M" company of the past six years in China have reported losses, losses of more than 2 billion yuan, but other companies in the same industry is profitable, the tax bureau that the situation is very unusual. Reported that the U.S. company has admitted it in China, tax avoidance, and the subsidiary company has agreed to pay the tax to the government.

tax is only one of the headaches of Microsoft in China, the Chinese authorities have launched an antitrust investigation of the company. (

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