Microsoft and Hewlett-Packard avoid billions of dollars of the United States taxes by shifting their profits offshore, a US Senate panel has said.
Senator Carl Levin, the chairman of the Senate’s Permanent Subcommittee on Investigations, said at a news conference on Thursday that the “hi-tech industry is probably the number one user of these offshore entities to transfer intellectual property.”
The panel subpoenaed internal documents from the companies and interviewed Microsoft and HP officials to write a report.
According to the report, in one example, Microsoft has saved up to $4.5 billion in taxes on goods sold in the United States from 2009 to 2011 by shifting $21 billion to low-tax nations such as Singapore and Ireland.
“The bottom line of our investigation is that some multinationals use our current tax system to engage in shams and gimmicks to avoid paying the taxes they owe,” Levin said.
“The tax practices and gimmicks range from egregious to dubious validity.”
Microsoft Corporation is a multinational computer technology corporation headquartered in Washington and HP is a hardware and software corporation based in California.