Senate hearing details tax avoidance practices claimed to be used by HP and Microsoft, amongst others.
Seattle Times reports that HP was used as an example of a company that uses “aggressive tactics” to avoid US taxes by “shifting profits offshore”.
At a US Senate hearing in Washington DC, Senator Carl Levin, D-Mich, Chairman of the Senate Permanent Subcommittee on Investigations cited HP and Microsoft as companies that adopt the “widening practice” of shielding large amounts of their earnings from the Treasury Department – a tactic that is claimed to allow multinational corporations to “avoid billions of dollars in US taxes” each year.
One method Microsoft purportedly carried out was to sell its intellectual property rights to subsidiaries in Dublin, Singapore and Puerto Rico, where revenue, which was higher than the amount that was paid for the rights to be acquired, is taxed at lower rates than in the US.
Despite being suspected of avoiding paying millions of dollars in tax over the last few years by shifting profits in this way, the article states that the companies were not accused by Levin of doing anything illegal.