A Microsoft subsidiary used Bermuda to avoid paying taxes on $315 billion in profit

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What you need to know

  • An Irish subsidiary of Microsoft managed to avoid taxes on $315 billion.
  • The Irish company in question has zero employees besides directors.
  • It achieved this zero-tax status by being "resident" in Bermuda.

Got $315 billion worth of profit lying around and want to learn how to avoid paying even a penny's worth of taxes on any of it? Ask Microsoft Round Island One, an Irish subsidiary of MS that used its Bermudian resident status to do just that.

As reported by the Guardian, Microsoft Round Island One, the company with zero employees to its name (besides directors), is not subject to tax because it's tax resident in Bermuda, a UK territory that doesn't charge corporation tax. This leaves a pretty big question out in the open: How does a company with zero actual employees make $315 billion in profit and not pay taxes?

If Microsoft's game here seems like a pretty overt way to game the system, that's because it is. In the Guardian's article, numerous sources acknowledge this tax avoidance as both a failing of Irish tax policy as well as proof that companies such as Microsoft need to be knocked down a peg.

For a frame of reference, Ireland's 2020 GDP was $433 billion. Compare that against the $315 billion that Microsoft Round Island One made, and the issue becomes even more apparent.

Robert Carnevale

Robert Carnevale is the News Editor for Windows Central. He's a big fan of Kinect (it lives on in his heart), Sonic the Hedgehog, and the legendary intersection of those two titans, Sonic Free Riders. He is the author of Cold War 2395. Have a useful tip? Send it to robert.carnevale@futurenet.com.