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Political Economy

Denmark seeks billions of unpaid taxes from Microsoft

Monday, 04 March 2013
The Danish treasury has missed of almost Dkr6 billion in unpaid taxes after Microsoft's acquisition of Danish Navision in 2002. As such the IT giant is being requested to pay back what has been described a history maker in one of Denmark's greatest treasure lost.

Danish media reports hold that the U.S. IT giant Microsoft, owes the Danish Treasury some Dkr5.8 billion in a historically large unpaid taxes in Denmark, the largest tax case for the small Scandinavian country ever.

The report follows that the Danish tax authority is in negotiations with Microsoft and the U.S. tax authorities, in an attempt to retrieve the huge amount returned to Denmark, Danish television, DR2 claims.

The case is described to have occurred through Microsoft's acquisition of the Danish IT concerns, Navision. The Danish company, which among other things was owned by brothers Erik and Preben Damgaard, had developed a successful financial program called Navision, which Microsoft would like to put its fingers in.

Therefore, Microsoft bought Navision in 2002 for Dkr10.8 billion, and the company was renamed Microsoft Business Solutions.

Shortly after the acquisition, Microsoft moved the rights of the financial management program from its new Danish company to low tax Ireland. It is this manoeuvre that the Danish tax authorities are reportedly looking at.

According to the Tax authority, Microsoft's Irish subsidiary bought the valuable rights of its Danish subsidiary too cheaply. This because Microsoft could move a large values from Denmark without that values being taxed legally in this country, the Danish tax authority believes.

Analysts feels that should the Danish authorities success to lay their hand on the money, that will be enough to finance a new super hospital, the next super Motorway between Herning and Aarhus or 15,000 teachers in primary schools.
By Scancomark.com Team

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