China levies 40 million fine on Microsoft for tax evasion

China has levied a fine of $140 million, or 840 million yuan, against Microsoft for tax evasion. The fee would cover back taxes and interest owed. Additionally, the agreement reportedly stipulates that Microsoft would pay more than 100 million yuan in additional taxes a year in the future.

According to Reuters, China's Xinhua news agency reported the 840 million yuan fine against a company whose wholly-owned subsidiary is located in Beijing:

The article refers only to a company whose name starts with "M," is one of the world's biggest 500 firms and which established a wholly-owned foreign subsidiary in Beijing in 1995. Microsoft is the only company that fits that description.

Reuters said that Microsoft neither confirmed nor denied the report.

Tax authorities investigated the "M" company after it had reported losses for six years whereas its peers had profitable business operations.

It said the U.S. company admitted to tax evasion and its mainland subsidiary had agreed to pay the central government.

Source: Reuters