Microsoft paid $6.3 billion in corporate tax in the EU – Germany received only a fraction

The distribution of the tax burden varies widely between EU member states. The bulk of the payments flowed to Ireland, where Microsoft maintains its European headquarters. In fiscal year 2025, the Irish subsidiaries recorded revenue of 196 billion US dollars and pre-tax profit of 47.1 billion US dollars with 6,654 employees. The company is considered one of the largest taxpayers in that member state.

Germany gets only a small slice of the pie

Comparatively little of that reached Germany. According to the report, Microsoft paid only 174.2 million US dollars (equivalent to roughly 153 million euros) in income taxes in this country. Yet Germany, with 3,471 employees, is one of the largest European locations for the company; the revenue generated here in the past fiscal year amounted to 11.68 billion US dollars. Pre-tax profit on the balance sheet for Germany, however, was comparatively low at 661.2 million US dollars.

Background: The tax model of the tech giants

The figures illustrate the well-known pattern of large US technology companies: profits are taxed where the European headquarters are registered, rather than where the revenues from millions of users are actually generated. The EU Commission has been pushing for reforms of this system for years, a system that has repeatedly come under criticism. Other groups such as Google and Apple also follow the model of taxation at corporate headquarters rather than at the place of business activity.

Worldwide, the corporate taxes paid by the company in the same period amounted to 28.7 billion US dollars, placing Microsoft second among the major US tech groups – behind Apple with 29.7 billion US dollars. In the three preceding years, Microsoft paid a total of 374 million US dollars in taxes in France, according to the report.

EU Commission pushing for reforms

The EU Commission had politically demanded the disclosure of country-specific tax data. With the now-submitted "Public Country-by-Country Report," Microsoft is one of the first US tech groups to voluntarily publish such a breakdown. Observers see this as a response to growing pressure from Brussels and several national parliaments calling for a fairer distribution of tax revenues.

Contributions in smaller EU markets are also modest. The company puts its employee count in Austria at 564 for fiscal year 2024/25. Overall, the country took in only 137.1 million euros from all major digital groups combined in the previous year, according to data underlying the report.

The discrepancy between revenue, profit and tax burden at various European locations thus remains a central issue in European tax policy. While Ireland, as the country of domicile of the large Irish subsidiaries, collects the bulk of the income taxes, countries like Germany and France, despite their economic significance and large user numbers, receive only comparatively small shares. Brussels intends to keep a close eye on this imbalance with a view to upcoming reforms.