Two Irish subsidiaries of Microsoft paid about $3 billion (€2.7 billion) in corporation tax last year, latest accounts show.
The main Irish subsidiary of technology giant Microsoft saw its profit rise in 2022 as demand from customers across the business drove organic growth, and paid $475 million in corporation tax during the year. Microsoft Ireland Operations Ltd (MIOL) recorded pretax profits of $3.56 billion for the year ended June 30th, a rise of more than $450 million on the prior year.
Separately, Microsoft Ireland Research, which licenses the rights to assets owned and developed by the company to others within the group, paid almost $2.6 billion in tax for the year, lower than the standard corporation tax rate, due to non-taxable dividends received and non-taxable gains on the liquidation of subsidiaries.
Revenues at MIOL were $65.4 billion, up from $56.2 billion a year earlier, while its operating profit also increased by almost $437 million to $3.5 billion. The company paid more than $475 million in tax for the year.
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The unit is involved in the marketing, selling and distribution of hardware and software products and services for Europe, the Middle East and Africa, and the Asia-Pacific region.
Services continued to play an important role in the company’s balance sheet, accounting for almost two thirds of total revenue for the year, at $42 billion, up from $32.2 billion the year previously. Products accounted for $23 billion over the 12 months to the end of June 2022, marginally higher than in 2021.
The figures also included revenue of $888 million from sales to Italy, up from $791 million in 2021.
Distribution costs were up slightly to $91.1 million, but administrative costs increased significantly to almost $3.3 billion.
Staff costs were also higher as the tech giant continued to expand its business. By the end of June last year, MIOL was carrying a wage bill of more than $295 million for almost 2,400 staff. In the previous year, the company had just over 2,000 staff. Pension costs also crept higher, nearing $13 million, compared with $11.65 million in 2021.
In January 2023, Microsoft announced it would cut 10,000 jobs from its global workforce. The Irish business has so far seen 180 jobs lost as a result of the cuts.
The accounts filed by Microsoft Ireland Research show the subsidiary made a pretax profit of $38.2 billion for the year. That included a $15 billion gain from the liquidation of some subsidiaries – Mojang Synergies, Microsoft Singapore Holdings and Microsoft Mopr Holdings Luxembourg.
Turnover rose $7 billion to more than $48.1 billion as royalty income from group companies increased.
The company paid a royalty of more than $74 billion to its parent company, more than double the prior year.
