Microsoft owes $1 billion in Denmark@ 2013/03/05
Danegeld is what civilised nations pay to make sure that they do not get invaded by Vikings armed with large axes. The last person in England who tried to avoid paying Danish taxes was Aethelred the unready, and it ended rather badly for him.
According to the Nyheder newspaper, the Vole owes the Danish Treasury about a billion dollars in what is its largest tax avoidance case. The government is working out a way of getting its paws on its cash without having to pillage New York, like it did plain old York.
If the vikings can squeeze the cash out of Microsoft they could finance a new super hospital, build the next Silkeborg Motorway or hire 15,000 teachers.
It all started when Microsoft bought the Danish IT outfit Navision.
Vole set the price of the rights to the Navision programme much lower than the market price and let its Irish subsidiary buy the rights of its Danish subsidiary.
This meant that the value of the Danish company made too small to be taxed. Indeed if Microsoft had its way it would get a refund.
Microsoft's Danish subsidiary previously made $11 billion dollars so the taxes should be about $5 billion plus interest of 0.8 billion. After the Irish manoeuvre it made sod all. In Ireland the tax rate is a lot lower than Denmark.
Vole insists that it has obeyed the rules, but received a nasty surprise when it got its tax bill which followed a Danish investigation.
Microsoft has done a sterling job hiding its money from the tax authorities for years and exploited every loophole there is to find.
However, with most European countries short of cash, and regular tax payers bled dry, big multi-nationals are finally being told to stop being bludgers.