Slashdot Mirror

← Back to Stories (view on slashdot.org)

Was Microsoft Forced To Pay $136M In Back Taxes In China?

Posted by samzenpus on from the pay-up dept.

itwbennett writes China's state-controlled Xinhua News Agency said on Sunday that an unnamed international company was forced to pay 840 million yuan ($136 million) in back taxes, as part of a Chinese government crackdown on tax evasion. The Xinhua article simply referred to it as the "M company," describing it as a top 500 global firm headquartered in the U.S. that in 1995 set up a wholly owned foreign subsidiary in Beijing. The details match Microsoft's own background, and no other company obviously fits the bill. Xinhua added, that despite the company's strengths, its subsidiary in China had not been not making a profit, and posted a loss of over $2 billion during a six-year period.

10 of 57 comments (clear)

  1. License Audit by decipher_saint · · Score: 3, Funny

    If that's the case I suspect a fairly large license audit on the way...

    --
    crazy dynamite monkey
    1. Re:License Audit by gstoddart · · Score: 2

      Do you think that Microsoft has any real leverage against the Chinese government? Or do you think Microsoft desperately wants a share of that market?

      I'm of the opinion that is Microsoft tried that with China they might not like what happened.

      --
      Lost at C:>. Found at C.
    2. Re:License Audit by show+me+altoids · · Score: 2

      the subsidiary "had not been not making a profit"? Does that mean they made a profit?

      --
      I feel sorry for people that don't drink, because when they get up in the morning, that's as good as they're gonna feel
    3. Re:License Audit by Opportunist · · Score: 2

      In the course of your audit you will find everything is in the best possible order.

      In the unlikely case that you should disagree here are two gentlemen who will take you to a place where you can come to the correct conclusion within the next five to twenty five years.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    4. Re:License Audit by tlhIngan · · Score: 2

      Or do you think Microsoft desperately wants a share of that market?

      Actually, Microsoft does. Because that's a heck of a lot of PCs, and if they are running Windows and Office, that's a heck of a lot of PCs not running Linux, OpenOffice or other software. Even if Windows and Office are pirated.

      All the big commercial vendors pretty much say as such - it's better to have the software pirated than to have those users seek out the competition, whatever it may be.

      So even if a user uses pirated Windows, that makes them less likely to use Linux instead. Because if they try the competition, they may like it.

  2. In return.... by Rick+Zeman · · Score: 4, Insightful

    Microsoft should send the Chines Gov't a $136M bill for piracy.

    1. Re:In return.... by wiggles · · Score: 3, Informative

      Chinese law is arbitrary and selectively enforced, often with no penalty for certain things. For example, smoking in certain areas is illegal, but there is no punishment for doing so, so people just smoke wherever they like.

  3. how funny. by WindBourne · · Score: 2

    Ms is constantly cheated over in China like any other western nation. All of the overhead leaves their chinese operations as a huge money loser. Now they have to pay taxes to China and then gets to post a loss on us taxes. Total Insanity

    --
    I prefer the "u" in honour as it seems to be missing these days.
    1. Re:how funny. by rtb61 · · Score: 2

      What creates the illusion of a money loser in the corporate tax lawyer parlance is shifting all revenue offshore against claimed costs in tax havens, including management costs and, licensing costs. So one company unit in a tax haven pays a negligible cost for the software and then places an enormous profit margin on the item, which is the bought by another company unit at the revenue point who then shock horror sells it at an imaginary loss (the profits hidden in the tax haven). All tax should be based on localised revenue, all offshore costs should be audited and any profit incorporated in them should be subject to taxation at the final revenue point. Any costs that fail audit or where information is not supplied should be excluded.

      When corporations cheat of taxes, they, upon a user pays basis are stealing from that economy that provides the revenue opportunity. The basically are not paying for their access to that economy and cheating all citizens of that economy, keeping in mind those citizens pay for the social, administrative and infrastructure costs that make those revenue opportunities available. So they are acting as economic parasites, making use of the economy without contributing back to it, this parasitism resulting in loss of social services and infrastructure to those citizens that provided the economy from which the tax cheats benefited. When it is done upon a large scale those companies and the individuals behind those companies are as evil as imaginable as they are cheating citizens of essential social services and shorting their life expectancy.

      --
      Chaos - everything, everywhere, everywhen
  4. Other 'M' companies by Sez+Zero · · Score: 4, Insightful

    McDonalds' was in China in the 90's. There are dozens of other M companies in the Fortune 500. I'm surprised only one fits the profile. Merck, MorganStanley, McKesson, Monsanto, Marriott, Manpower, MGM Resorts, Micron, etc. That was the time to setup in China, I wouldn't be surprised if it was something like MRC Global, Inc and the MS hint was dropped just for headlines.