Monday, September 24, 2012

MULTINATIONALS' LEGAL AVOIDANCE OF US TAXES

Microsoft's legal avoidance of US taxes cited at Senate hearing
THE SEATTLE TIMES
SEPTEMBER 24, 2012 @ 12:05AM | JANET I TU ~
The Seattle Times AND KYUNG M. SONG ~ The Seattle Times
Microsoft became Exhibit A for corporate tax-skirting during a U.S. Senate hearing on a widening practice that congressional investigators say allows multinational corporations to avoid billions of dollars in U.S. taxes annually by shifting profits offshore.

Chiefly, Microsoft sold its intellectual-property rights to subsidiaries in Dublin, Singapore and Puerto Rico. But the revenue those entities booked from selling Microsoft products far exceeded what they paid to acquire the rights — differences that were taxed at lower foreign rates. Altogether, Microsoft avoided paying at least $6.5 billion in U.S. taxes over three years by using such maneuvers, according to the report.
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“The bottom line of our investigation is that some multinationals use our current tax system to engage in shams and gimmicks to avoid paying the taxes they owe,” Levin said. “The resulting loss of revenue is one significant cause of the budget deficit, and adds to the tax burden that ordinary Americans bear.” At a time when huge budget cuts are looming, “these offshore schemes are unacceptable,” he said.rt.

more at: http://kpbj.com/business_daily/2012-09-24/microsofts_legal_avoidance_of_taxes_cited_at_senate_hearing