Microsoft China Reportedly To Pay $140 Million Tax Fine

Microsoft Corp. appears to be the foreign company which Chinese state media said will pay almost $140 million in back taxes, the largest such payment ever, according to a Reuters report late Tuesday. The previous report of the tax fine, from the official Xinhua News Agency, said only that the company in question was headquartered in the U.S., had a name that starts with "M," was one of the top 500 firms in the world, and set up its wholly foreign-owned enterprise in Beijing in 1995. Reuters said that Microsoft was the only company that fit the description. Xinhua said that after investigations by China's tax authority, the company admitted to tax avoidance by having transferred massive profits from its China unit to the U.S. The company agreed to pay 840 million yuan ($137 million) in back taxes and related interest, Xinhua said. In a later report, Reuters quoted a Microsoft spokesman as saying only that "China receives tax revenue from Microsoft consistent with the terms of the agreed advanced pricing agreement" reached between China and the U.S. in 2012 with regards to Microsoft's operations in China.