It is no secret that Microsoft is one of the richer companies around, but it seems that one of the ways Microsoft managed to hold on to their money is by funneling their profits overseas to countries like Bermuda where corporate tax rate is effectively at zero percent. Microsoft isn’t the first company to do that as Apple and Google have said to have been frowned upon by taking advantage of such loopholes. Now it looks like Microsoft has landed themselves in a bit of hot water in Denmark as reports are saying that Danish authorities are looking to slap Microsoft with a tax levy of $1 billion.
This tax levy is over Microsoft’s acquisition of software maker Navavision back in 2002 and according to reports, Microsoft has been relying on Carribean-based shell companies to operate Navavision’s enterprise planning and account units, thus allowing them to funnel profits away from Denmark to Bermuda where they will not be taxed on their profits. Despite Denmark’s modest corporate tax of 25%, it’s still 25% more than what they would have to pay in Bermuda. Microsoft and Danish officials are said to be in talks at the moment regarding the tax bill, a bill which we’re assuming Microsoft is hoping to see reduced.