The wire reports that Microsoft is holding onto $108 billion outside US territory because if it repatriated the money to its homeland, it would have to fork out $34.5 billion in taxes – a rate of around 31.9 percent.
Bloomberg concludes that Microsoft pays a paltry 3.1 percent in taxes on its foreign income because Ireland, Puerto Rico and Singapore give it significant tax breaks.
The Internal Revenue Service levies taxes of 35 percent on profits corporations make in foreign lands but the winkle is they don’t have to pay the taxman until the money comes back to the USA.
For similar reasons, Apple has a bundle of cash amounting to around $200 billion but 90 percent of that is held in overseas accounts too.
The IRS is investigating Microsoft’s tax returns going back to 2004, the wire said, and hopes to shear some of the software giants excess wool.