Boston, MA 11/26/2014 (wallstreetpr) – Microsoft Corporation (NASDAQ:MSFT) has in the recent times faced several pumps in China. In fact, several leading U.S. tech companies have had their fair share of challenges in China, including antitrust investigations. In somehow veiled report by the Chinese Xinhua news organization, a company that fits the description of Microsoft must pay some huge amount of money over irregular tax practices.
The company cited by the Xinhua report is said to have its name beginning with “M” and is a member of 500 biggest firms in the world. The company also set up a subsidiary in the Chinese city of Beijing in 1995. According to an article published by Reuters, the description given fits Microsoft Corporation (NASDAQ:MSFT).
However, Microsoft Corporation (NASDAQ:MSFT) has neither confirmed nor denied that it was the company in question. Nonetheless, the company did point out through a spokesperson that its tax practices in China and elsewhere have always been straight.
According to the Xinhua report, “M” will be required to pay 840 million yuan in back taxes, as well as interest on the same. The company will also pay another 100 million yuan in future annual tax. That brings the tax burden for “M” to about $140 million.
All that happened as it also emerged that the company “M” raised eyebrows in China with its six-year losses in the country. The company posted losses amounting to about 2 billion yuan in China in a period of six years, yet its peers were making profits. The Chinese authorizes concluded that the company was into some irregular tax practices.
Multinational companies across the world have and attempt to have strategies to narrow their tax burden where possible. It is reported that that Microsoft Corporation (NASDAQ:MSFT) had overall tax rate of 21% in fiscal 2014, which was well behind 35% standard corporate tax rate in the U.S.
In some instances, U.S. companies have sought to relocate their tax offices abroad to enjoy lower tax rates. It appears as though the appetite to lower tax has attracted trouble for Microsoft Corporation (NASDAQ:MSFT) in China. The company is also facing antitrust issues in the country.
Microsoft Corporation (NASDAQ:MSFT) continues to make lower tops and higher bottom, the stock is in a downtrend which started on September 14, 2014 since then the stock has lost 4.18% of its market value. The stock is trading below its 20-Day EMA of $47.71 with RSI of 50.71.