Microsoft faces $29 billion tax dispute in the United States

Microsoft has announced that it will challenge a request by the US tax authority to pay an additional $28.9 billion in back taxes for the period between 2004 and 2013. The Internal Revenue Service (IRS) has been conducting an audit into how the company distributes its profits across different countries and jurisdictions. However, Microsoft claims that the issues raised by the IRS are no longer relevant to its current practices. This move by Microsoft highlights the ongoing concern that large corporations pay insufficient taxes in developed nations. Critics argue that technology giants often report lower profits in high-tax countries and higher profits in jurisdictions with lower tax rates to minimize their tax liabilities. In a recent filing with securities regulators, Microsoft disclosed that the IRS is seeking an additional tax payment of $28.9 billion, along with penalties and interest. Despite the demand, Microsoft asserts that it has always complied with the IRS's regulations and has paid the required taxes both in the US and internationally. The company states that it anticipates any taxes owed after the audit will be reduced by up to $10 billion, taking into account tax legislation enacted under former President Donald Trump. Similar calls for increased tax payments have been made towards other American tech firms such as Amazon and Facebook. Microsoft has also faced scrutiny from other US authorities this year, including a $20 million settlement with the Federal Trade Commission (FTC) for unlawfully collecting data on children who created Xbox accounts. Nonetheless, the company is likely to achieve a significant victory with its plan to acquire Activision Blizzard, the makers of Call of Duty, for $68.7 billion, as the deal is expected to be finalized in the near future.