Microsoft publishes first public country-by-country tax report under EU rules

Microsoft’s first public country-by-country tax report gave a rare window into how the company books profit across Europe, with Ireland again standing out in the center of its regional tax footprint. The filing, released June 30, covered Microsoft’s fiscal 2025, from July 1, 2024, to June 30, 2025, and disclosed revenue, profit, employee counts, income tax accrued and income tax paid for each country and region covered by the new European Union rules.

The disclosure arrives as Brussels begins enforcing public country-by-country reporting for multinationals with more than EUR 750 million in global revenue. The rules apply to fiscal years beginning on or after June 22, 2024, and the European Commission published the final template on December 2, 2024. Microsoft said it had already been giving similar information to tax authorities under the OECD framework, but that putting the numbers in public view provides more context around figures that can otherwise look surprising on their own.

Microsoft said the new format is not directly comparable with local statutory accounts because it aggregates entities by country, and it warned that accrued tax and cash tax paid can differ because of timing. The company said it paid $6.3 billion in income tax in the EU in fiscal 2025. It also said France was an outlier because cash tax paid there reflected a one-time refund of tax overpaid in an earlier year, and that it paid $374 million in tax in France over the prior three years.

The Irish figures show why the new reporting regime has become a flashpoint. Microsoft’s Irish subsidiary had 6,654 employees, posted $196 billion in turnover and $47.1 billion in profit before tax, and paid $5.6 million to the Irish treasury in the fiscal year ending June 30, 2025. Tax-reform advocates said that spread raises questions about the mismatch between economic substance and where profits are booked, especially in a business where intellectual-property management and financial operations are based in Ireland.

The FACT Coalition said the filing sharpened concerns about the way profits move through the corporate structure and argued it showed the need for stronger tax rules for an AI-driven economy. Microsoft shareholders had already pushed for more transparency, backing tax-disclosure resolutions in 2022 and 2023 with more than 20% support each year. The company is also contesting a $28.9 billion IRS transfer-pricing dispute covering tax years 2004 through 2013, making the new public filing a test of whether transparency changes corporate behavior or simply makes the route profit takes easier to see.