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Microsoft's Irish arm paid $77bn dividend to tech giant last year

Independent.ie logo Independent.ie 25/05/2019 John Mulligan
An Ireland-based unit of Microsoft paid a massive $77bn (€68.8bn) dividend to its group shareholder firms in the last financial year. Stock photo: PA © PA Archive/PA Images An Ireland-based unit of Microsoft paid a massive $77bn (€68.8bn) dividend to its group shareholder firms in the last financial year. Stock photo: PA

An Ireland-based unit of Microsoft paid a massive $77bn (€68.8bn) dividend to its group shareholder firms in the last financial year.

The dividend surge - the figure paid by Microsoft Ireland Research was 140 times the $550m it handed over in the previous year - came as US President Donald Trump gave domestic firms a chance to repatriate cash to America at significantly reduced tax rates in what's been a lacklustre initiative.

If the full $77bn had been repatriated by Microsoft to the United States last year, it would have represented 11pc of the total $665bn that was sent home by US firms in 2018 under the scheme.

Before the scheme was introduced, Microsoft had about $132bn in overseas funds.

During its 2018 financial year, which covers the 12 months to the end of last June, Microsoft Ireland Research converted $103.9bn on its share premium account into profits available for distribution.

"Each year, we determine the level of dividends to be paid and manage our treasury affairs so as to support the commercial and investment objectives of our global business," said a Microsoft spokesperson.

Microsoft Ireland Research licenses rights to assets owned by the company to other group companies.

It made a $10.5bn profit in the year to the end of last June - more than twice the amount it made in the previous year.

Newly-filed accounts for another of Microsoft's main Ireland-based units - Microsoft Ireland Operations - show that it paid a $3.5bn dividend to Microsoft Ireland Research in the 12 months to the end of last June.

That was 10 times more than it paid in the previous year.

The accounts for Microsoft Ireland Operations show the dividend was paid as the unit saw a surge in revenue and increased profits.

Its revenue jumped by $4.7bn in the 12 months to the end of June last year to $27.5bn, as it benefited from increased business across all its segments. Its operating profit rose by $113m to $1.23bn.

Microsoft has experienced a resurgence under CEO Satya Nadella, with its $966bn market capitalisation now higher than that of Apple and Amazon.

Microsoft Ireland Operations division markets, sells and distributes Microsoft hardware and software products and services in the EMEA region.

Of its $27.5bn revenue in the year, $16.1bn was generated from product sales and $11.3bn from services.

Microsoft Ireland, headed by Cathriona Hallahan, employs about 2,000 people here and earlier last year moved to a new €134m campus at Leopardstown in south Dublin.

New, one-off rules introduced by Mr Trump in 2017 saw a 15.5pc corporate tax rate introduced on repatriated cash, and 8pc on non-cash or illiquid assets.

While the total in repatriated cash was $665bn last year, Mr Trump previously said he believed that $4trn would be repatriated.

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