The Danish Treasury reportedly wants Microsoft Corporation (MSFT) to pay about $1 billion in back taxes on its purchase of the Danish software company Navision. A Danish news outlet reports that after the 2002 sale, Microsoft apparently sold the company to a subsidiary in Ireland, which has a lower tax rate then Denmark.
Microsoft Corporation (NASDAQ:MSFT) could owe Denmark, big time. The news outlet DR reports that the company could owe as much as $1 billion for its acquisition of the Danish software company Navision back in 2002. This latest report is just one in a series of reports involving Microsoft and other tech giants and allegations of tax dodging around the world. French authorities ruled just last month that the company would have to pay a $70 million tax adjustment.
According to the report in DR, Microsoft Corporation (NASDAQ:MSFT) bought Navision in 2002 at a price of $1.3 billion and then sold its enterprise resource planning and accounting departments to a subsidiary of Microsoft that’s based in Ireland. That same subsidiary apparently owns other companies located in other tax havens like the Caribbean. The transaction made it possible for Microsoft to shift its profits from Navision out of Denmark, which has higher tax rates.
The Danish Treasury has evaluated the total cost of Microsoft’s actions regarding Navision to be a little over $1 billion, including the tax on the sale of the company and 11 years of interest. The result is a tax bill that’s almost as much as the company paid for Navision originally.
Microsoft Corporation (NASDAQ:MSFT) isn’t the only tech giant that’s in hot water over its tax practices. Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN) and Google Inc (NASDAQ:GOOG) have all been in the hot seat over their tax practices lately, especially in Europe. Technically the practices followed by these companies are said to be legal, although the world’s governments are beginning to look more closely and take issue with them.
Shares of Microsoft are trading mostly flat in early Monday afternoon trades on the NASDAQ.