Tech firms Microsoft and Hewlett-Packard have been accused of using offshore units to shield billions of dollars from US taxes, it has emerged.
A US Senate panel, Senate's Permanent Subcommittee on Investigations, said the firms used intellectual property, royalties and license fees in tax havens such as the Cayman Islands to skirt US taxes.
"The hi-tech industry is probably the number one user of these offshore entities to transfer intellectual property," the Telegraph quoted Senator Carl Levin, chairman of the panel, as saying.
"The tax practices and gimmicks range from egregious to dubious validity," he added.
According to the paper, the committee said that from 2009 to 2011, Microsoft shifted 21 billion dollars offshore, almost half its US retail sales revenue, saving up to 4.5 billion dollars in taxes on goods sold in the US.
It also said the firm shifts royalty revenue to units in lower-tax nations such as Singapore and Ireland, avoiding billions of dollars of additional taxes in the US, the paper said.
According to the report, witnesses set to testify include tax executives from Microsoft and Hewlett-Packard, a tax executive from Big Four accounting firm Ernst and Young, and senior officials from the US Internal Revenue Service. (ANI)