Documents recently submitted in Ireland reveal that Microsoft’s principal subsidiaries based there sent almost $56 billion (£40.7 billion) in dividends to their American parent firm last year. The profits, largely generated by Microsoft Round Island One (MRIO), the investment-holding offshoot of the worldwide technology titan, were dispatched to the parent company, Microsoft Corporation, in the United States during the year leading up to June 2023. MRIO declared an additional dividend of $17.8 billion following the financial year. It is not mentioned explicitly in the accounts whether the Irish offshoot has handed this sum over or if it’s still due.
Complex corporate structures link Microsoft’s Irish entities, where each one essentially funnels dividends to MRIO, which, in turn, remits them to the parent corporation headquartered in Washington. MRIO, with earnings mostly sourced from intra-group dividends dispensed by another Ireland-based entity, Microsoft Ireland Research, paid $414,000 in corporate taxes on an income of $38 billion. The profits from these internal dividends, forming a significant portion of MRIO’s earnings, are exempt from additional tax obligations.
Meanwhile, revenues rose last year at Microsoft’s leading Irish operation, reflecting broader trends within the global software company. The turnover for Microsoft Ireland Operations (MIOL) surged to $69.9 billion for the annum ending June 30, 2023, an increase from the previous year’s $65 billion. The subsidiary, involved primarily in marketing, sales, and distribution across Europe, Middle East, Africa and the Asia-Pacific area, reported a pretax profit of $3.9 billion with a $588.7 million corporate tax bill. After calculating deferred taxes, the total came to roughly $652 million. The financials also show that MIOL paid a $9 billion dividend to MRIO.
Microsoft Ireland Research, an entity that licenses the rights to assets conceived and held by Microsoft to other group members, observed a $3.85 billion upswing in revenue, taking its total to nearly $52 billion. This was primarily due to increased royalty income, and its operating profit soared by $1.89 billion to hit $23.3 billion.
The company faced a corporate tax duty of $4.2 billion, yet due to double taxation relief and other mitigating steps, the ultimate tax invoice amounted to $2.8 billion.