China ups efforts to stop tax evasion

Bloomberg Beijing

CHINA was expanding efforts to rein in what authorities said was tax evasion by foreign companies, with Microsoft being required to pay more than $150 million (R1.61 billion), an official familiar with the matter said yesterday.

The payments – including 840 million yuan (R1.5bn) in back taxes, interest and more than 100 million yuan in additional annual disbursements going forward – were detailed in a report on Sunday by the state-run Xinhua News Agency, which stopped short of naming the company involved. That company is Microsoft, according to the person, who is not authorised to speak publicly and asked not to be identified.

Microsoft could not confirm that it was the subject of the Xinhua report, the company said.

The case, which Xinhua said was the biggest since China joined an international anti-tax-evasion programme last year, follows a series of regulatory and law enforcement actions against foreign companies operating in the country.

Global car manufacturers, food companies and technology companies, including Microsoft, have faced antitrust probes this year, leading trade groups to complain about unfair treatment.