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Microsoft may be after-taxed $1 Billion by Denmark

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In year 2002 Microsoft purchased the Danish financial management program Navision for approx US $1.6 Billion. Shortly after this, Microsoft Denmark sold Navision to Microsoft Ireland (duty free area) for almost nothing, trying to cheat Denmark of our part of future income. Navision is now known as Dynamics NAV and is still being maintained in Denmark, making Microsoft approx $1.5 Billion per year. But because Microsoft has offices in Bermuda (etcetera) the company still pays almost no tax in Denmark. All this has caused the Danish authorities to accuse Microsoft of tax fraud, demanding another approx $1 Billion in taxes.

I guess Denmark has unique tax laws?

Buying a business and transferring its legal address to some other country purely for tax purposes has been a standard operating procedure used by global corporations (and not just US-based ones) for about the last 40 years.

Be interesting to see how they pursue this case. And under which legal system they'd file it. Jurisdiction and venue is always a tricky thing when dealing with multinationals. I'm guessing about the only thing this will result in is Microsoft pulling Navision development out of Denmark; and (purely for PR purposes) negotiating something (but certainly not $1 billion) with Denmark if they feel it will work to their advantage long-term.

Oh well...I wish Denmark good luck with this one. :)

Well, I read this post shortly after you posted it, and have been trying to think of what to remove from what I'd like to say other than everything.

<[email protected]$$_MODE>

I'm drawing a blank.

Perhaps I could ask a question... What if regular people did the same thing? It is all legal after all, right?

Perhaps we're mistaking "legal" and "ethical" when we approach these topics. My belief is that they are not the same, but then again, I could be mistaken. Perhaps whatever is passed into law is necessarily ethical?

</[email protected]$$_MODE>


Hey, could we do this in the US for companies that offshore their labor to evade federal & state minimum wage laws, unemployment insurance, and Social Security taxes?  :D

Did anything happen when we were bitching at Coca Cola and McDonalds because they're doing tax evasion?

I'm going to be surprised if anything much happens. Lots of jobs, etc.


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