Denmark seeks $1bn from Microsoft in tax case

c6fd000 gyi0059237931 Denmark seeks $1bn from Microsoft in tax case

Microsoft Corporationacquired Navision in a stock-and-cash deal for about $1.3 billion,and then quickly transferred assets to Ireland, thus avoidingDenmark’s notoriously high corporate taxes.The Danish government suspects Microsoft sold the valuableassets well below market value, and is looking for compensation onthe sale, as well as 11 years of interest.Tax rates in Denmark are 25%, and in Ireland can be as low as12.5%, depending on the type of business. In comparison, the UScorporate tax rate is 40% and in tax havens such as Bermuda, theBahamas, and the British Virgin Islands, corporations pay no tax atall, according to KPMG’s 2013 tax rate compilation.Denmark’s government plans to lower its corporate tax rate to22% to improve competitiveness and boost recession recovery.Corporations, mostly US-based, have come under scrutiny fortheir international tax loopholes and avoidance, Apple and Googlebeing at the forefront. The Danish-Microsoft debacle is one of thefirst cases in which a government is attempting to retrieve losttax revenue.The dispute is likely to be settled outside of court.

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Denmark seeks $1bn from Microsoft in tax case

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