Microsoft reportedly owes Denmark $1bn in tax

PanARMENIAN.Net - In 2002, Microsoft purchased Navision from the Danish firm Navision A/S for around 5.6 billion kroner ($1.3 billion). Navision was later turned into Microsoft Business Solutions (later rebranded Microsoft Dynamics NAV), one of the most profitable parts of the Microsoft empire. Shortly after Microsoft purchased Navision, they moved the legal rights to Ireland in an attempt to cut down on tax expenditure, according to Neowin.

A report by Danish news outlet, DR Forsiden, has shown that Microsoft could be asked by the Danish government for up to $1 billion in tax from the Navision deal. Lars Kiertzner, a professor at the Copenhagen Business School and an expert on accounting, described the case as "remarkable", before saying it's "definitely one of the biggest [they've] seen." The report goes on to say that all the accounting was handled by Microsoft U.S., with the Danish arm having very little do with it. In an effort to avoid tax, Microsoft set the value of the company too low.

Microsoft moved Navision's legal rights to Ireland, which has a lower rate of tax. Navision as an Irish company is partly owned by companies in Bermuda and the British Virgin Islands, which are both tax havens. Microsoft's Dynamics NAV divisions employ 600 people in Denmark, with an annual revenue of about $10 billion, roughly 7.4% of Microsoft's total yearly revenues, Neowin says.