Under the temporary cut, Trump offered reduced tax rates for companies looking to bring money into the country. Rather than the usual 35% tax, Microsoft only had to pay 15.5% on cash on 8% on non-cash assets.Independent.ie, The result was $665 billion pouring into the US, with Microsoft accounting for over 10% of that. The move means the company now has less than $70 billion in cash outside of the US. “Each year, we determine the level of dividends to be paid and manage our treasury affairs so as to support the commercial and investment objectives of our global business,” Microsoft told Independent.ie.
Vital Taxes or Covering Tracks?
Ireland is a strong base for Microsoft, housing 2,000 people in its Dublin campus and acting as a hub for the sale and distribution of its hardware and software in Europe. However, the company has previously been accused of using the country as a tax haven, with its effective tax rates for foreign corporation between 2.2 and 4.5%. Apple is one company that’s been called out about tax breaks in Ireland in a very public manner. In 2016, the European Commission ruled that Ireland was due a further $15 billion in disputed taxes. Apple has been reluctant to pay up, refusing to attend a European hearing. Microsoft has had no such controversy, some argue that it’s transfer brings useful tax contributions to the US. The more skeptical, however, would say it gives the company any easy out as Ireland plans to close its double Irish avoidance loophole by 2020.
