T
The poster formerly known as 'The Poster Formerly
http://blogs.techrepublic.com.com/tech-news/?p=2142
Microsoft told to pay 175 million in taxes in India
A unit of Microsoft Corp. has been asked by an Indian appellate
authority in income tax to pay more than 7 billion rupees - or about US
$175 million on income earned for the assessment period of 1999 to 2005.
The amount is computed based a tax rate of 15% on royalties earned in
the country. If interest is added, the total burden is likely to go even
higher.
How did this situation came about? According to The Economic Times:
The essence of the case, which pertained to the period 1999-2004,
is Microsoft’s decision not to pay tax in India citing several
legalities, including the double taxation avoidance agreement with the
US. The company, which sells its software in India through a circuitous
route involving several group companies, had maintained that its deal
with the customers is a sale and no royalty payment is involved. It is
this position that has now been rejected.
The irony is that what nailed the case here is Microsoft’s own EULA. Tax
authorities cited a clause in the document which stated “the product is
licensed, not sold,” concluding that since the software is licensed, a
royalty is involved.
Obviously, it is not the last word on the case yet. Microsoft believes
it should not have to pay the tax, citing several legalities, including
a double taxation avoidance agreement with the United States. At the
moment, Microsoft can move on to the Income-Tax Appellate Authority
(ITAT) and the hig court to appeal its case.
A Microsoft spokesperson said, “Microsoft believes it is in full
compliance with the Indian tax laws and the income-tax treaty agreement
between India and the US. Microsoft is reviewing the order and we will
determine our course of action accordingly.”
Still, I find it interesting that Microsoft believes its products to be
licensed - as stated in its EULA, and not sold. I have never really
considered the implications of “licensing” a software versus
“purchasing” one. What do you have to say about this?
_________________
Wow, now this is just priceless! And MS is fighting it because they
want to have their cake and eat it to with their license.
--
"Fair use is not merely a nice concept--it is a federal law based on
free speech rights under the First Amendment and is a cornerstone of the
creativity and innovation that is a hallmark of this country. Consumer
rights in the digital age are not frivolous."
- Maura Corbett
DRM and unintended consequences:
http://blogs.techrepublic.com.com/security/?p=435&tag=nl.e101
Microsoft told to pay 175 million in taxes in India
A unit of Microsoft Corp. has been asked by an Indian appellate
authority in income tax to pay more than 7 billion rupees - or about US
$175 million on income earned for the assessment period of 1999 to 2005.
The amount is computed based a tax rate of 15% on royalties earned in
the country. If interest is added, the total burden is likely to go even
higher.
How did this situation came about? According to The Economic Times:
The essence of the case, which pertained to the period 1999-2004,
is Microsoft’s decision not to pay tax in India citing several
legalities, including the double taxation avoidance agreement with the
US. The company, which sells its software in India through a circuitous
route involving several group companies, had maintained that its deal
with the customers is a sale and no royalty payment is involved. It is
this position that has now been rejected.
The irony is that what nailed the case here is Microsoft’s own EULA. Tax
authorities cited a clause in the document which stated “the product is
licensed, not sold,” concluding that since the software is licensed, a
royalty is involved.
Obviously, it is not the last word on the case yet. Microsoft believes
it should not have to pay the tax, citing several legalities, including
a double taxation avoidance agreement with the United States. At the
moment, Microsoft can move on to the Income-Tax Appellate Authority
(ITAT) and the hig court to appeal its case.
A Microsoft spokesperson said, “Microsoft believes it is in full
compliance with the Indian tax laws and the income-tax treaty agreement
between India and the US. Microsoft is reviewing the order and we will
determine our course of action accordingly.”
Still, I find it interesting that Microsoft believes its products to be
licensed - as stated in its EULA, and not sold. I have never really
considered the implications of “licensing” a software versus
“purchasing” one. What do you have to say about this?
_________________
Wow, now this is just priceless! And MS is fighting it because they
want to have their cake and eat it to with their license.
--
"Fair use is not merely a nice concept--it is a federal law based on
free speech rights under the First Amendment and is a cornerstone of the
creativity and innovation that is a hallmark of this country. Consumer
rights in the digital age are not frivolous."
- Maura Corbett
DRM and unintended consequences:
http://blogs.techrepublic.com.com/security/?p=435&tag=nl.e101