China levies $140 million fine against 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:
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.
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Chuong's passion for gadgets began with the humble PDA. Since then, he has covered a range of consumer and enterprise devices, raning from smartphones to tablets, laptops to desktops and everything in between for publications like Pocketnow, Digital Trends, Wareable, Paste Magazine, and TechRadar in the past before joining the awesome team at Windows Central. Based in the San Francisco Bay Area, when not working, he likes exploring the diverse and eclectic food scene, taking short jaunts to wine country, soaking in the sun along California's coast, consuming news, and finding new hiking trails.
Seriously, software piracy is so rampant over there, and the government does NOTHING to stop it.
That's why Microsoft was posting losses in China: They can't make any money when the vast majority of the population is stealing their stuff. And if they aren't making money, there's no money to tax. Or at least, that's how it's supposed to work, but evidently in China: You're taxed based on how much you're /supposed/ to be making.