Microsoft’s testy relationship with China just got a bit tougher.
The Chinese government has levied $137 million in back taxes and interest against the company, according to a report by China’s Xinhua state news service.
The report doesn’t identify Microsoft by name, labeling the target of the fine as “M,” described as a world-renowned U.S.-based company that started its Chinese subsidiary in 1995. Microsoft launched Microsoft (China) Co Ltd. in Beijing in 1995.
Xinhua’s report said that the company’s Chinese unit was losing money on paper, even as the Chinese subsidiaries of other firms in the industry were profitable. The investigation, Xinhua said, found the company was shipping its profits overseas in avoidance of domestic taxes.
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