• norsk
    • English
  • English 
    • norsk
    • English
  • Login
View Item 
  •   Home
  • Norges Handelshøyskole
  • Department of Business and Management Science
  • NoCet - Master theses
  • View Item
  •   Home
  • Norges Handelshøyskole
  • Department of Business and Management Science
  • NoCet - Master theses
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

Money moves : Tax planning in multinational companies : a case of Microsoft

Anggraeni, Susana
Master thesis
Thumbnail
View/Open
Master thesis.pdf (760.2Kb)
URI
http://hdl.handle.net/11250/300682
Date
2015
Metadata
Show full item record
Collections
  • NoCet - Master theses [88]
Abstract
This thesis presents tax minimisation strategies, how multinational companies use them and what

regulations and actions that international policymakers and national governments use to tackle

aggressive tax planning. Theories and relevant literature are used to describe and confirm the use

of these strategies by multinational companies.

Focusing on Microsoft, various tax minimisation strategies are used by this company to

minimise and even avoid the tax liabilities. By exploiting the loopholes in the U.S. and international

tax regulations, Microsoft is able to avoid U.S. withholding tax and tax on the income

passive. Their international operations and geographic locations are structured for the tax

minimisation purpose. Internationally, Microsoft uses the operation centres in Singapore, Ireland

and Puerto Rico to transfer the intellectual property rights and to retain the foreign income

outside the United States avoiding the U.S. withholding tax. Using disregarded CFC entities,

Microsoft shifts the intellectual property between the subsidiaries in the low-tax jurisdictions

without being taxed. Microsoft manages to "bring" back the foreign income to the United States

untaxed through investment in the U.S. financial markets done by the foreign subsidiaries.

Double Irish Dutch sandwich is also used to channel the profits further to Bermuda. Microsoft

operation in Norway seems to be used for the tax purpose as it is financed by debt and is loaded

with high operating costs. There is also an indication that Microsoft shifts the revenue from North

America to Norway. The sales from Norwegian market are booked in Ireland through

Luxembourg. Even though there are value-added activities in Norway, Microsoft claims that

there is none and due to residency-based tax regulations, only six percent of the total sales in

Norwegian market are recognised as taxable income in Norway. Lack of transparency due to the

use of tax havens increases the conviction of aggressive tax planning done by Microsoft.

Microsoft's business model involving intellectual property is one step ahead of the existing

tax regulations. Some actions have been taken to mitigate any practices of exploiting the existing

regulations. Future development seems promising as more countries are involved.

Contact Us | Send Feedback

Privacy policy
DSpace software copyright © 2002-2019  DuraSpace

Service from  Unit
 

 

Browse

ArchiveCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsDocument TypesJournalsThis CollectionBy Issue DateAuthorsTitlesSubjectsDocument TypesJournals

My Account

Login

Statistics

View Usage Statistics

Contact Us | Send Feedback

Privacy policy
DSpace software copyright © 2002-2019  DuraSpace

Service from  Unit