A Microsoft subsidiary registered in Ireland made a profit of $314 billion in the fiscal year that ended June 2020, but did not pay any tax as it is tax resident in Bermuda.

Microsoft Round Island One has no employees, other than three directors. Its principal activity is holding investments in group companies.

The Guardian newspaper in Britain reported that “the revelation of how much money Microsoft has saved by routing via Ireland comes as finance ministers attempt to hammer out an agreement to tackle multinational tax avoidance in London on Friday, ahead of the G7 meeting in Cornwall this month”.

There are increasing calls for a minimum global corporate tax rate. The US has proposed a minimum level of 15 per cent. The principle of a global corporate tax rate is expected to be endorsed at the G7 gathering from June 11 to 13.

Microsoft Round Island One had an operating profit of $13.6 billion in the year that ended June 30, 2020. That was up from $9.8 billion in the prior year. However, its total profit was $314.7 billion, primarily as a result of a $301 billion gain from the liquidation of subsidiaries Microsoft Luxembourg USA Mobile SARL, and MACS Holdings Ltd.

Microsoft Round Island One received the subsidiaries' surplus and their remaining assets at the date of liquidation.

The parent company of Microsoft Round Island One is MBH Limited, which is incorporated in Bermuda where there is no corporate tax. The ultimate parent company is Microsoft Corporation in the US.

In its annual report, Microsoft Round Island One said: “As the company is tax resident in Bermuda, no tax is chargeable on income.”

In the Guardian report, Paul Monaghan, the chief executive of the Fair Tax Foundation, said the “tax aggression” was “beyond belief.”

A Microsoft spokesperson quoted said the company was fully compliant with all local laws and regulations in the countries where it operates.