According to the Danish newspaper, investigation has been started that examines whether Microsoft has avoided paying tax on the business of their Danish subsidiary, which they bought for $1.3 billion. Specifically, Microsoft Navision has fictionally sold the company to their own Irish subsidiary, which is owned by another Microsoft company that resides in tax paradise in the Caribbean, which enables them to switches Navision’s profits without paying taxes in Denmark.
Similar tactics are applied by a large number of other international companies, which typically through subsidiaries in Ireland shift profits to countries with very low or no taxes. Danish authorities are reportedly are considering a penalty against Microsoft in the amount of 5.8 billion Danish Crowns, or more than a billion dollars, which sums up both tax and penalty against the company which tried to avoid the payment.
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