A new compliance filing from Microsoft details how the company allocates income across European countries in ways that lower its overall tax payments.
The report, released under a 2021 European Union directive, shows Microsoft declaring nearly 40 percent of its global income in Ireland while reporting just 0.5 percent in Germany. Similar patterns appear in France and Italy, where profit margins remain low despite large markets.
Microsoft responded with a blog post noting that some figures may look surprising at first. The company stated it follows all relevant laws and pays additional taxes on payroll, value-added items, and property.
Jeff Bullwinkel, the company's vice president and deputy general counsel in Europe, said Microsoft pays the taxes it owes in every country where it operates. He added that the firm had the world's second-highest corporate tax bill after Apple, totaling 28.7 billion dollars with 6.3 billion dollars paid in the European Union.
