Microsoft's Skype deal may have cheated the US taxman out of the equivalent of £2.6bn. A financial expert has claimed the mindboggling £5.3bn purchase of Skype is a giant tax dodge, with "thoughtless tax policy... making a bad deal look good".
Many are puzzled as to why Microsoft would pay that kind of wonga for Skype. Skype makes massive revenues but runs at a loss, so we presumed Microsoft was buying the VoIP company for its 170 million customers. Financial wonk Larry Elkin has a different theory.
Elkin reckons Microsoft is sitting on a giant pile of cash from selling Windows and doing business in overseas markets, and it needs to do something with that stockpile of spondooliks. Publically traded companies have to redistribute leftover loot to shareholders, and bringing those surplus simoleons into the US would see a vast chunk carved off by the taxman -- less than 65 per cent and potentially as little as 45 per cent would reach shareholders.
Skype is officially from Luxembourg, so buying it keeps the Microsoft money overseas. If Skype makes money, Microsoft is quids in -- or Euros in, or whatever they use in Luxembourger shops. If Skype doesn't make money, Microsoft has still avoided a hefty tax bill.
Of course, tax-related chicanery is par for the cause with big companies, especially multinationals that can take advantage of favourable financial conditions overseas. It's all legal and above board -- tax avoidance rather than tax evasion -- but that's small comfort to the taxpayer.
Apple is also sitting on a vast cash stash of £40bn, and we're sure the Cupertino-based company has its own crack tax hacks working round the clock.