Microsoft Corporation (MSFT) To Pay $70 Million French Tax Adjustment


Microsoft Corporation (NASDAQ:MSFT) will be required to pay a $70 million readjustment on its taxes in France, according to the French media outlet BFMTV. This is the third time in just five years the company’s French operations had to pay a tax readjustment.

Microsoft Corporation (MSFT) To Pay $70 Million French Tax Adjustment

French tax authorities audited Microsoft Corporation (NASDAQ:MSFT) in 2010 in connection with the transfer prices between the company’s subsidiary in France and the parent company between the years of 2007 and 2009.

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BFMTV reports that the French subsidiary of Microsoft Corporation (NASDAQ:MSFT) works under a different subsidiary that’s based in Ireland. Whenever a Microsoft product is sold, the French subsidiary only covers a small part of the price, which is its commission on the sale of the product. The majority of the price of the product is redirected to Ireland.

Tax officials in France have disputed the amount of the commissions Microsoft’s French subsidiary receives on sales. They also suspect that the subsidiary has a direct commercial presence in France. Officials raided Microsoft’s Paris office in 2012.

Microsoft Corporation (NASDAQ:MSFT) said it is still disputing this most recent readjustment and that it expects to receive money back from an adjustment after the audit of a different fiscal year. This wouldn’t be the first time Microsoft got tax money back from French authorities. Between 1999 and 2011, French officials had to pay $32 million back to Microsoft, including the adjustment amount and interest.

A number of other tech companies are on the hot seat in other parts of the world, especially the U.K., as governments in numerous countries begin to crack down on allegations of tax dodging.

Trading on shares of Microsoft Corporation (NASDAQ:MSFT) is mostly flat in Friday afternoon trading at the NASDAQ.