Mandatory EU Country-by-Country Report Shows $47 Billion in Pre-Tax Profits Flowing Through Dublin While Luxembourg Pays a 3.3% Effective Rate, Well Below the OECD’s 15% Floor
Microsoft released its first-ever public Country-by-Country Report on June 30, covering fiscal year 2025, disclosing that Ireland accounted for 38.1% of Microsoft’s global pre-tax profits; $47.08 billion, while employing just 6,654 people, or 2.92% of the company’s total workforce. Crypto Briefing
The filing was mandated by EU Directive 2021/2101, which requires corporations to submit public country-by-country reports revealing where companies claim to earn money for tax purposes versus their actual economic activities.
Microsoft’s report shows a clear disconnect between the two; the company said it earned nearly 40% of its global income in tax-friendly Ireland, but just 0.5% in Germany, which is Europe’s largest market.
Luxembourg’s 3.3% effective rate on Microsoft’s profits sits well below the OECD’s Pillar Two 15% global minimum corporate tax threshold. Microsoft has tried to frame the disclosure as evidence of responsible corporate citizenship, pointing to its $6.3 billion EU tax bill.
Microsoft is currently contesting the biggest tax case in U.S. history and is positioning itself to be one of the top beneficiaries of the artificial intelligence boom. In total, U.S. companies avoided paying at least $40 billion from such havens, according to a separate report.
The disclosure proves exactly what tax transparency advocates have argued for years; that profit-booking bears almost no relationship to where value is actually created. Ireland did not build Microsoft. It just offered a lower rate.
Check out our previous coverage of Big Tech, taxation and regulation on The Trusted Times.
