Microsoft is slated to pay Chinese authorities 840 million yuan (roughly $137 million) in back taxes and interest, according to a report by state-sponsored news agency Xinhua. In addition, the Redmond-based software company is on the hook for an additional 100 million yuan tax payment next year.
The report doesn’t mention Microsoft by name, but says that the company involved in the tax evasion case is among the 500 largest in the U.S., has the first initial “M,” and opened its Chinese subsidiary in Beijing in 1995. Microsoft is the only company that fits those criteria.
Microsoft, for its part, did not confirm or deny the report, saying in a statement emailed to GeekWire that the company pays all necessary taxes.
“In 2012 the tax authorities of China and the US agreed to a bilateral advanced pricing agreement with regards to Microsoft’s operations in China. The agreement is an acknowledgment by both countries that Microsoft’s profits are subject to the appropriate tax in China. Microsoft is proud to have been a responsible partner in these first-of-a-kind bilateral tax negotiations on international business between the US and China.”
Microsoft has been having a hard time with the Chinese government of late, facing an antitrust probe from the country’s regulators. In addition, state-run media has been critical of the company’s products, claiming that Windows 8 could collect sensitive data and share it with the U.S. government.