Microsoft will end up paying 840 million yuan (roughly $137 million) in back taxes and interest to the Chinese government. It has also been reported by China’s Xinhua that Microsoft will also have to put out over 100 million yuan a year in taxes.
The tax evasion charge is another thorn in the side of U.S companies operating within the country. Microsoft has gone on a record in a statement saying that it has honored a prior 2012 tax agreement struck between the U.S and China in regards to what it should pay to do business there.
The Xinhua news agency stated that Microsoft—identified as “M” and one of the top 500 companies in the world that setup shop in China in 1995—has reported losses in the region for six years. In that period Microsoft lost over 2 billion yuan. As result Microsoft was investigated and found at fault. Xinhua reported that Microsoft admitted wrongdoing and agreed to pay the government.
Microsoft has also been the target of raids and having their Windows software banned from use in government computers. The company is still under investigation.