Microsoft used international tax maneuvers to avoid paying billions of dollars in taxes the past three years, according to a U.S. Senate committee memo. The head of that committee said it s a sign that tax loopholes need to be closed.
Bloomberg reports the memo says Microsoft used transactions with subsidiaries overseas to save at least $6.5 billion in taxes. The memo, released ahead of a hearing in Washington, D.C. Thursday, also says Hewlett-Packard created a series of short-term internal loans allowing the company to tap into offshore cash without paying taxes.
Sen. Carl Levin, D-Michigan, chairman of the Permanent Subcommittee on Investigations, did not accuse the companies of doing anything illegal, but he did tell reporters the tax maneuvering puts the burden of taxes onto citizens and business who don t use armies of lawyers and accountants.
Representatives from Microsoft and Hewlett Packard are expected to testify at the hearing.
According to written testimony, Microsoft corporate vice president for worldwide tax Bill Sample said, Microsoft s tax results follow from its business, which is fundamentally a global business that requires us to operate in foreign markets in order to compete and grow. He added that Microsoft abides by U.S. and foreign tax laws.
Read more at Bloomberg
Story compiled by KING 5's Travis Pittman