MICROSOFT CORPORATION | Tax Transparency Report at MICROSOFT CORPORATION

Status
21.25% votes in favour
AGM date
Previous AGM date
Proposal number
10
Resolution details
Company ticker
MSFT
Resolution ask
Report on or disclose
ESG theme
  • Governance
ESG sub-theme
  • Tax
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Technology
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders request that the Board of Directors issue a tax transparency report to shareholders, at reasonable expense and excluding confidential information, prepared in consideration of the indicators and guidelines set forth in the Global Reporting Initiative’s (GRI) Tax Standard.
Supporting statement
Supporting Statement
Profit shifting by corporations is estimated to cost the US government $70 - 100 billion annually.[1] Globally, the OECD estimates revenue losses of $100 – 240 billion.[2] The PRI, representing investors with $89 trillion assets under management, states that tax avoidance is key driver of global inequality.[3]
With the COVID-19 pandemic resulting in large deficits for many governments, there has been increased government and community focus on whether corporations are paying a “fair share” of tax and contributing to societies where profits are earned. 90% of companies believe that the financial impacts of the pandemic may lead to more tax disputes, while 38% expect authorities to become more rigorous in tax examinations.[4]
In October 2021, 136 countries agreed to a framework for global tax reform.[5] In the US, increases in infrastructure and social spending are linked to tax reforms.[6] The proposed Disclosure of Tax Havens and Offshoring Act will require public country-by-country reporting (CbCR) of financial (including tax) data by SEC-registered companies. In November 2021, the European Union approved a directive to implement a form of public CbCR for multinationals operating in the European Union with group revenue of over $860 million.[7]
Currently, Microsoft does not disclose revenues or profits in non-US markets, and foreign tax payments are not disaggregated, challenging investors’ ability to evaluate the risks to our company of taxation reforms, or whether Microsoft is engaged in responsible tax practices that ensure long term value creation for the company and the communities in which it operates. Microsoft’s approach to taxation has been repeatedly challenged by tax authorities globally.[8] In 2020, an Irish subsidiary recorded profits of $315 billion, despite having no employees.[9]
The GRI Standards are the world’s most utilized reporting standard.[10] The GRI Tax Standard was developed in response to investor concerns regarding the lack of corporate tax transparency and the impact of tax avoidance on governments’ ability to fund services and support sustainable development.[11] It is the first comprehensive, global standard for public tax disclosure and requires public reporting of a company’s business activities, including revenues, profits and losses, and tax payments within each jurisdiction.[12]
This proposal would bring our company’s disclosures in line with leading companies who already report using the Tax Standard.[13] Our company already reports CbCR information to OECD tax authorities privately, so any increased reporting burden is negligible.
 
[1] https://thefactcoalition.org/trillions-at-stake-behind-the-numbers-at-play-in-u-s-international-corporate-tax-reform/.
[2] https://www.washingtonpost.com/us-policy/2020/11/19/global-tax-evasion-data/
[3] https://www.globalreporting.org/about-gri/news-center/backing-for-gri-s-tax-standard/
[4] https://www2.deloitte.com/content/dam/Deloitte/global/Documents/dttl-tax-beps-survey-2021-report.pdf
[5] https://www.oecd.org/tax/international-community-strikes-a-ground-breaking-tax-deal-for-the-digital-age.htm.
[6] https://thefactcoalition.org/international-tax-reform-in-build-back-better-act-a-promising-start/
[7] https://www.internationaltaxreview.com/article/b1vf7yc65qpzcd/this-week-in-tax-eu-on-track-for-public-cbcr-by-2023
[8] https://www.propublica.org/article/the-irs-decided-to-get-tough-against-microsoft-microsoft-got-tougher; https://www.theguardian.com/australia-news/2015/apr/08/google-apple-and-microsoft-defend-tax-set-up-that-shifts-revenue-offshore
[9] https://www.theguardian.com/world/2021/jun/03/microsoft-irish-subsidiary-paid-zero-corporate-tax-on-220bn-profit-last-year
[10] https://assets.kpmg/content/dam/kpmg/xx/pdf/2020/11/the-time-has-come.pdf
[11] https://www.globalreporting.org/about-gri/news-center/backing-for-gri-s-tax-standard/
[12] https://www.globalreporting.org/standards/media/2482/gri-207-tax-2019.pdf
[13] https://www.globalreporting.org/about-gri/news-center/momentum-gathering-behind-public-country-by-country-tax-reporting/

How other organisations have declared their voting intentions

Organisation nameDeclared voting intentionsRationale
Bell Asset ManagementFor
Kutxabank Gestion SGIIC SAU.For
Anima SgrForMicrosoft's public tax disclosure through GRI reporting standard would address and sustain investor demands for tax transparency at the global level.
Boston Trust WaldenFor

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.