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Irish subsidiary of Microsoft paid zero corporate tax on £220bn profit in 2020


An Irish Microsoft subsidiary paid no corporation tax last year despite making £222bn in profit as it is “resident” in Bermuda for the purpose of avoiding tax.

Microsoft Round Island One has zero employees, yet the company had profits in 2020 that totalled almost 75% of Ireland’s entire GDP.

The subsidiary collects licence fees from around the world for software produced by Microsoft.

The revelation of how much tax Microsoft has avoided via Ireland comes as world leaders scramble to form an agreement on multinational tax avoidance before the G7 meeting in the UK later this month.

Microsoft Round Island One has its registered address in central Dublin yet states in its accounts that “as the company is tax resident in Bermuda, no tax is chargeable on income.”

Tax campaigns say that the “tax aggression displayed by Microsoft, and facilitated by Ireland” is “beyond belief”.

The US Senate has previously launched an investigation into Microsoft’s use of its Irish subsidiaries to avoid tax that would otherwise need to be paid in the US and other countries.

Back in 2012, Carl Levin, a former senator that chaired the subcommittee on investigations, said that Microsoft was “probably the number one user of these offshore entities to transfer intellectual property”.

A Microsoft spokesperson said: “Microsoft has been operating and investing in Ireland for over 35 years and is a longtime taxpayer, employer and contributor to the economy. Our organisational and tax structure reflects our complex global business. We are fully compliant with all local laws and regulations in the countries where we operate.”

Chief executive of the Fair Tax Foundation, Paul Monaghan, said: “The tax aggression being displayed by Microsoft, and facilitated by Ireland, is beyond belief.

“We have here a holding company that has posted $314.7bn in profits, which is a number not far short of Ireland’s entire national gross domestic product. Despite shareholder dividends of $55bn being paid out, not one cent in tax has been paid.

“This race to the bottom on tax competitiveness is truly distasteful, not least at a time when countries across the globe are trying to rebuild their public services post-Covid. It is no longer tenable for a decent and responsible nation state to stand up and proclaim its democratic right to produce CFCs or lead additives, and beggar the impact on the rest of the world. The same goes for the enablement of tax avoidance and evasion, which are toxic pollutants of the world’s financial systems.”

Harry Pererra
Harry Pererra

Harry turns on his experience in journalism and programming to write about the latest news in the world of tech and the environemtn. When he isn’t writing for usave he is working towards his Blue Belt in Brazilian Jiu Jitsu, and prefers dogs to cats.

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