Ironically, some IRS accountant must have some msft-back-taxes_v3_new_newer_final.xlsx file on their computer.
Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
241–250 of 334 posts
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#242Earlier quoted context omitted.
Well even if MS are found to be liable for this tax bill, MS has in the region of $100 billion "Cash on hand" so I doubt that they will go bankrupt over this.
This sounds to me like an gigantic amount of money. I looked it up and apparently it was $136B in 2019¹ and $111B today². And Microsoft, although it is the company with the most cash on hand, is not an outlier here with Alphabet at $121B and Apple at $100B². I really don't know why they do this though. [1] https://www.cnbc.com/2019/11/07/microsoft-apple-and-alphabet... [2] https://www.macrotrends.net/stocks/charts/MS…
> I really don't know why they do this though.
Because you're looking at absolute numbers and not percentages/relative values. That much cash on hand sounds absurd when you're only looking at the absolute number of it, but the amount it represents is "just" 6 months of revenue. And any good financial advisor will tell you it's a good idea to keep 6 months of earnings as savings.
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#243No message about how greedy Europe wants to steal money from big tech, yada yada yada. Oh, it's the USA this time? Wait, does this mean that these big tech were really not paying their fair share and the USA was just slow to get caught to it? I guess so.
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Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#244This spells bad news for "MICROSOFT B.V.", the famous Dutch software company that has reported being responsible for billions of revenue of the Microsoft Corporation over those years.
Apple and others are working to explain how the majority of app and hardware sales have a nexus in Ireland. But wait til you hear of Ugland House ( https://en.wikipedia.org/wiki/Ugland_House ) in the Caymans - 10,000 sq ft, 5 stories... ... and registered offices of 42,000 companies.
To be fair, the Ireland case for EU seems more understandable. The EU has an economic union, and consumers still pay local VAT.
If EU doesn't like one country has too low tax rates, that's an EU matter.
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#245Transfer pricing is sort of just a pile of black magic. Microsoft's American business is required to charge their European subsidiary some "fair market price" for the Windows intellectual property, but what is a fair price for a license to sell Windows on the European continent? Unlike with fungible goods, there is no established market for this product that the IRS can easily refer to.
In this case Microsoft is saying that some amount of their IP was developed by their overseas subsidiary and thus doesn't need to be included in the transfer pricing calculation, so in their process of making up imaginary amounts of money to charge themselves for their own products they also need to deduct that. If e.g. most of the Windows networking stack was created in Germany they need to figure out what percentage of the value of the overall Windows IP is added by the ability to connect to the internet.
Understandably, it's possible for reasonable observers to disagree on the values chosen here, this is not a case of black and white corporate misconduct (tax issues essentially never are).
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#246No message about how greedy Europe wants to steal money from big tech, yada yada yada. Oh, it's the USA this time? Wait, does this mean that these big tech were really not paying their fair share and the USA was just slow to get caught to it? I guess so.
No it doesn't. What it definitely could mean with democrats in power is the USA becoming just as insane as Europe thinking the big corporations are the "bad guys" and we have to "drill" them.
It's a Western problem, not a Europe problem. It's more so in Europe but this contagion that big corporations are evil and governments are good is growing more and more in the US too.
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#247[flagged]
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#248Yea hello it’s Mr Smith here from the tax department. I’ve just been reviewing your file and it seems that you are a little short in your tax payments by…… let’s seeeee ……. ummmm …… yes, $29,000,000,000. Can you pay it now please?
> Can you pay it now please?
well i need to talk to my accountant. btw, i see we have a detailed and exhaustive license audit scheduled for the IRS tomorrow...
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#249Earlier quoted context omitted.
Every law is judged with the intent behind the action... except for taxes which is the single exception I know of. And here the intent is pretty clear.
I think this is more of an Anglo-Saxon vs rest of Europe distinction. In UK (and presumably US) the letter of the law is more important than the intent. In the rest of Europe the intent is more important than the exact letter. In both cases it is up to the judiciary to make the trade-off/judgement.
Anglo-Saxon? What has that to do with Common vs. Civil Law? Or is it a magic term like "Caucasian" or "Judeo-Christian" that just handwaves some psuedo-historical distinction for "us vs them"?
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#250The infraction happened in 2004-2013. So that would be over three billion dollars per year. Microsoft’s operating income in fiscal year 2005 was about $15B and in 2013 almost $27B. So you can kind see where the IRS is getting this number: if they believe that Microsoft evaded tax worth about 10-15% of its earnings before taxes, that’s how it would add up to this whopping sum. It seems like Microsoft believes they can…
> The stock price doesn’t seem to be hurting pre-market at all. Big investors will have eyes and ears inside the IRS, so will have known for years about this already.
IRS started a tax investigation in 2007 of Microsoft's 2004-2006 tax returns, which has been somewhat exposed to the public due to the lawsuits along the way.
https://www.seattletimes.com/business/microsoft/microsoft-ir...