Was Microsoft Forced To Pay $136M In Back Taxes In China? 57
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.
License Audit (Score:4, Funny)
If that's the case I suspect a fairly large license audit on the way...
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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.
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This is why there should be a 5% tax on revenue. Profits can be manipulated. Revenue less so.
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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
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It's a basic principle that branded products will lose market share if people are momentarily forced to try something different. This is why Kraft foods spends so much money maintaining a cheese reserve; if--due to some temporary disaster--there was a shortage of cheese then they might not be able to keep shelves stocked with their brand and loyal customers would be forced to try something they might discover that they prefer.
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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.
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Sure Microsoft; after you sign this memorandum where you enter into binding agreement to fork over payment for all costs associated with the audit, plus an additional non-refundable fee of 6139000¥ plus a 31390¥ retainer.
Costs to Include payment for some additional vacation time for management and senior staff and the cost of purchasing additional computers, server equipment, software, and gov't employees, labor, overtime hours desired to assist with the audit, and other ordinary expenses.
Breaking Agreement With Microsoft (Score:1)
Sure Microsoft; after you sign this memorandum where you enter into binding agreement to fork over payment for all costs associated with the audit, plus an additional non-refundable fee of 6139000¥ plus a 31390¥ retainer.
Costs to Include payment for some additional vacation time for management and senior staff and the cost of purchasing additional computers, server equipment, software, and gov't employees, labor, overtime hours desired to assist with the audit, and other ordinary expenses.
It actually sounds like Xinhau broke some kind of law or agreement here, just from the way this went down.
Specifically, they disclosed the company by describing it without ever saying its name. They knew everyone would figure out who the company was. But they never would have done that unless they were prohibited from telling you the company. So they broke whatever was prohibiting them from doing that.
It's unlikely Microsoft will sue them for it (not impossible, but unlikely), but no Western company will
OOO! Ooooo! OOOO! I got the answer Mr. Kotter! (Score:1)
Was Microsoft Forced To Pay $136M In Back Taxes In China?
Um...who gives a shit. It's chump change to them.
No? (Score:2)
In return.... (Score:5, Insightful)
Microsoft should send the Chines Gov't a $136M bill for piracy.
Re:In return.... (Score:4, 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.
Three truths about the China tax deal (Score:1)
1. MSFT revenue in China is lower than actual software revenue should be, mostly due to non-payment of software licenses (aka IP theft) by Chinese government and military units (half the economy). This has not changed. And probably never will.
2. MSFT is being forced to pay taxes "avoided" in the EU and US as well. The Irish and Luxembourg tax "shelters" are being ripped apart. And Google and Amazon will also be forced to pay those too. It helps when you shame the economic figures by country and point out ex
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They gained marketshare and when people think PCs they immediately associate it with Windows. Those few that will want/be able to buy an OS will choose windows. Eventually, if they DO get some anti-piracy laws in place it will be an incredible boost. But that's unlikely to ever happen, even less now when the PC has to compete with mobile.
The laws exist. Enforcement in the courts is the problem.
It is a fine for quitting XP (Score:2)
The issue is not "Irish Tax Shelters". Even without these Microsoft would still be losing money. You are closer on point on the IP theft. This is not so much as a tax, rather it is a fine for Microsoft dropping support for XP, the widely used but rarely paid for OS. Remember, taxes and the laws are not applied in a "neutral" fashion.
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You don't need to do that. The US uses domical to calculate taxes, the rest of the world use residence. This caused a gap witch the accountants plunged in. Fixing the US tax code so it is rational would solve the problem.
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if you want to stop that, invade ireland or establish protectionist trade laws.
As an American I find both of those options to be quite appealing. I'm going to write my congressman and ask that he do both. We can get right wing war hawks to support invasion, and left wing corporatist to support increasing protection of local business. Even if those businesses happen to be trillion dollar corporations.
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had not been not (Score:2, Redundant)
So it made a profit?
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how funny. (Score:3)
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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
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Other 'M' companies (Score:5, Insightful)
Not Giving Full Name (Score:2)
Yes we can (Score:2)
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Yes, by passing a huge body of tax law that is selectively enforced against foreign companies (and some domestic companies that have the nerve to object to government policies) you can absolutely end all the tax evasion that you don't choose to ignore.
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Wait, are you talking about China or US or France?
Unbelievable reactions to a positive step... (Score:1)