Microsoft denies tax avoidance in China says tax on Sino-US

Yesterday, "Microsoft was asked to pay 840 million of dollars in tax and interest on China for Cross-border tax avoidance," in response, Microsoft responded yesterday that it was not certain whether the companies referred to in some media reports were Microsoft, and said that China's tax authorities had been based on the "Sino-US bilateral reserve tax pricing Agreement" Get a tax break from Microsoft. Microsoft's message suggests that there is no tax avoidance in China.

Media reports show that a 500 m company in China's subsidiaries strong but for many years claimed to be at a loss, the tax authorities in China to counter tax evasion investigation. After investigation, the company's cumulative loss is not because the product in the market is poor, but because more than half of the profit will be paid to the U.S. parent company, as the provision of research and development services and technical support of the franchise costs. In the end, M company's China subsidiary overdue and interest amounts to 840 million yuan, according to the current sales scale of the enterprise, its future annual tax increase of more than 100 million yuan for China. Some media to this analysis said M company is Microsoft Company.

In this regard, Microsoft said yesterday, "although we are not sure whether some media coverage refers to the company is Microsoft, but it can be confirmed that the Chinese tax authorities have been based on the ' Sino-US bilateral reservation tax pricing agreement ', from the Microsoft Company to obtain tax sharing. ”

According to Microsoft, with the active promotion of Microsoft, the Chinese and American tax authorities in 2012 reached a "Sino-US bilateral reserve tax pricing agreement" on the government's share of taxes on cross-border operations. The agreement, which determines that Microsoft's Cross-border business tax is divided by the two governments, is also the first bilateral Tax agreement on Cross-border operations between China and the US.

Lin, director of the Department of Finance and Taxation, Lingnan College, Zhongshan University, told reporters that when multinational companies conduct business activities, many of their transactions are carried out between overseas and parent companies, there will be repeated taxation or intentional use of related transactions to avoid tax, in order to solve these problems, In general, the company will propose the pricing principle and calculation method of the related transaction to the competent tax authorities of the respective countries of the affiliated transaction, and the two countries ' competent tax authorities shall separately review and confirm the bilateral reservation tax pricing agreement. Generally agreed to the terms of the agreement, and will be agreed whether to solve the previous year's tax by appointment pricing, the content of the agreement is generally not open to outsiders.

China tax reported that in November 2012, the State administration of taxation, Beijing and Microsoft signed a bilateral reservation pricing implementation agreement, at that time, the tax authorities on the basis of the signing of the booking pricing agreement, Microsoft has been paid to adjust the tax, the Microsoft company was also retroactively adjusted to pay a large amount of tax.