After changing its business model in Spain in 2018, microsoft It has seen its income grow, and also its profits, in the country. This year has not been an exception, since Microsoft Iberia has registered revenues in its fiscal year 2021 slightly above 690 million dollars, 30% more than those achieved in its previous fiscal year. In addition, its profits have improved by 60% year-on-year. But not everything is good news for the company, since according to Lainformacion, the Ministry of Finance has opened another fiscal inspection to the company, the fourth of the last 15 years.
This inspection focuses above all on the VAT that Microsoft has declared and also on the Corporate Tax, and comes after the company has lost one of the lawsuits they had in Spain as a result of their problems with the Treasury. In addition, he still has two other lawsuits open related to various sanctions and settlements, and according to both, he has to pay a total of 35 million euros for them.
Since changing its business model in Spain, Microsoft has started reporting more revenue in Spain. Specifically, instead of declaring all its income obtained in Spain in Ireland after re-invoicing it to its subsidiary in Ireland, it began to declare in Spain the distribution of the company’s software license sales, both for installation on local computers and on the cloud.
Of course, before doing so, they made sure that the income account that they declared in Spain went up, but that the taxes that they were going to have to pay in the country were not going to go up significantly. Indeed, although in 2020 and 2021 Microsoft has invoiced more than 1,200 million in Spain, the company only paid about 20 million euros in Corporate Tax for both years.
At Microsoft they thought that this change would probably placate the Public Administration, but nothing could be further from the truth, since this inspection that the Treasury has just opened focuses on the years that have passed since Microsoft changed its billing system in Spain. We will still have to wait until the results are known. Meanwhile, the ministry also continues to surround other technology companies and their activity in Spain, which has caused Google to pay more than 3 million euros in 2018, Facebook to pay 34 million in 2020 and IBM to pay an amount last year. in concept of sanction that exceeded 50 million.
