The ongoing row into the amounts of tax paid by leading corporations continues, as it has emerged that Microsoft pays no tax on almost £1.7bn in online revenues, reports The Daily Telegraph.
The revenues are thought to be generated in the UK on products including the new Windows 8 operating system and other software downloads.
However, Microsoft channel the online payments through Ireland and Luxembourg, where corporation tax rates are lower.
The revelation is just the latest in a long line of exposés concerning the amount of tax paid by corporate giants including Vodafone, Starbucks and Google.
Companies are not breaking the law by diverting revenue abroad, but the practice of legal tax avoidance has come to be viewed as morally reprehensible at a time when millions of public sector workers have faced a pay freeze and unemployment has reached record levels.
The bad publicity over tax avoidance forced Starbucks last week to commit to overpaying its tax bill by £20m over the next two years. The commitment came after it emerged that Starbucks had paid just £8.5m in tax to the UK exchequer in 14 years, against almost £3bn of revenue.
The managing director of Starbucks UK said the company had been shocked by the strength of feeling that the company's tax avoidance measures had generated among the public and its customers.
Microsoft have already faced criticism in the US, where a congressional investigation revealed that the company shielded itself from over £4bn in tax by sending money out of the US to low-tax countries including Ireland and Singapore.
"These loopholes and abuses exact a tremendous cost. What these gimmicks do is shift the burden of taxes on to citizens and businesses who don't use armies of lawyers and accountants," said Carl Levin, the US Senator who conducted the congressional investigation into tax avoidance.
Source:
Tax row turns to Microsoft over £1.7bn of online revenues (The Telegraph)
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