Microsoft loses tax appeal in India
TAX AUTHORITIES in India have denied Microsoft's administrative appeal of about $175 million in royalty taxes on its revenues there in 1999 through 2004.
Microsoft dominates the software market in India. The company had argued that its revenues came from software sales and were therefore not subject to India's 15 per cent royalty tax. It cited a trade agreement between the US and India meant to avoid double taxation of sales revenues in the two countries.
The tax appeals commission in Delhi didn't buy the Vole's position, however. It pointed to Microsoft's End User Licence Agreement (EULA), which states "the product is licensed, not sold." It said that revenues from software licences are royalties, not sales.
Microsoft said it is reviewing the order and indicated that it hasn't decided yet whether or not to appeal the ruling to higher authorities.
Microsoft dominates the software market in India. The company had argued that its revenues came from software sales and were therefore not subject to India's 15 per cent royalty tax. It cited a trade agreement between the US and India meant to avoid double taxation of sales revenues in the two countries.
The tax appeals commission in Delhi didn't buy the Vole's position, however. It pointed to Microsoft's End User Licence Agreement (EULA), which states "the product is licensed, not sold." It said that revenues from software licences are royalties, not sales.
Microsoft said it is reviewing the order and indicated that it hasn't decided yet whether or not to appeal the ruling to higher authorities.
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