Microsoft Investors File Resolution Targeting Tax Practices
Microsoft Corp., a staple of ESG investment funds, is being called out by a group of shareholders for what they say is its poor track record on tax transparency.
Investors managing more than $350 billion in total filed a resolution demanding that Microsoft report in line with the Global Reporting Initiative Tax Standard, according to a statement from the group on Tuesday. The resolution also calls on Microsoft to disclose its tax and financial information on a country-by-country basis.
“Technology is a sector that has historically been characterized by tax avoidance, particularly for large multinationals like Microsoft,” said Katie Hepworth, responsible tax lead at Pensions & Investment Research Consultants Ltd., which coordinated the resolution. The risk of regulatory “investigation and intervention” is a particular concern for investors, Hepworth said in a statement.
That’s as taxation becomes a hot topic in Europe, where officials have taken aim at complicated structures used by multinationals to reduce tax rates or drive them to zero. Lawmakers last month advanced a plan for a minimum corporate tax rate of 15% from 2023 for large firms, to implement a landmark agreement by 136 countries to stop luring companies with ever-lower tax rates.
Microsoft recorded profits of $315 billion in an Irish subsidy in 2020, “despite having no employees” there, according to PIRC, Europe’s largest independent corporate governance and shareholder advisory consultancy. PIRC has supported similar resolutions at Cisco Systems Inc. and Amazon.com, as part of a larger campaign targeting 30 companies in industries that have a record of tax avoidance or that count governments among their customers.
Representatives for Cisco declined to
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