Microsoft to pay nearly $25million in back taxes to New Zealand Tax Office

The tech giant’s tax avoidance has come under increasing scrutiny from governments, and Microsoft is no exception. Microsoft has previously transferred more than 8 billion pounds through Ireland-based Microsoft Ireland Operations (MIO) and HMRC has accused it of easily avoiding tax by 100 million pounds ($960 million). Microsoft had to pay $247,48,658 in taxes to the IRS after a settlement audit in June last year.

Microsoft to pay nearly $25million in back taxes to New Zealand Tax Office

Microsoft has conducted an audit through the Transfer Pricing policy, which relates to the fees it pays for services it provides to its subsidiaries. Like many countries, Newland Inland Revenue has been stepping up scrutiny of the tax practices of multinationals.

Details of Microsoft’s tax avoidance have not been made public. Presumably, it should be overcharged through insider trading, and multinationals may misrepresent profits and pay less tax in countries such as New Zealand. In 2014, Microsoft transferred ownership of its New Zealand subsidiary from the United States to Luxembourg and moved its operations to Bermuda in 2017. Microsoft New Zealand said it would face a $24.7 million “tax adjustment” in its annual accounts this year and confirmed it had reached a settlement with New Zealand’s IRS.

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