According to informed sources, this practice is quite common in Silicon Valley enterprises. To this end, many members of Congress are pushing a proposal to amend the tax system, hoping to plug such "loopholes".
"quite common"
Washington post 10 reported that a survey by the US Senate showed that Microsoft's branch in Puerto Rico has only 177 employees, but its annual sales of 201/kloc-0 are as high as $4 billion.
Intriguingly, because Puerto Rico's tax system is different from that of the 50 States in the United States, Microsoft can "save" about $65.438+$50 million in tax revenue every year.
For example, a person familiar with the matter said that Microsoft first sold a copyright to a Puerto Rican branch, which produced the corresponding software product, and then "imported" the software product to the United States, so that the sales amount appeared on the books of the Puerto Rican branch, thus enjoying a lower tax rate.
Many people in the industry said that this practice of Microsoft is "completely legal" and "quite common". Many Silicon Valley enterprises with high brand value, patents and copyrights often set up their branches in low-tax areas such as Europe, Asia or the Caribbean, and then transfer their business to branches as much as possible, thus reducing the tax payable.
According to this survey by the US Congress, Microsoft transferred 47% of its sales from the US branch to the Puerto Rico branch by transferring its business.
raise a question
After this "tax saving" method of Silicon Valley enterprises in the United States was exposed, it caused many questions. According to some analysts' estimates, American finance loses at least $654.38+000 billion in tax revenue every year.
Allen auerbach, an economist at the University of California, Berkeley, believes that if the tax system is not revised, the phenomenon of "legal tax avoidance" of such enterprises will become more and more serious in the future. "This is one of the main problems facing China's tax system".
In response to outside questions, a Microsoft spokesperson declined to clarify whether the company changed its practices and whether it supported the proposal of the US Congress to amend the tax system.
William sumter, vice president of Microsoft, said when questioned by the Senate Standing Investigation Subcommittee: "We always abide by the laws of the United States and other countries when doing business at home and abroad." However, Sample also admitted that the tax system does have "room for improvement"