Microsoft to hide Irish Tax Haven data

US software giant Microsoft has taken steps to shield from the public, the value of Tax Haven transactions of two Irish-registered subsidiaries that have enabled it to save billions of dollars in US taxes.

The company applied to the Irish Companies Office on Monday to re-register its Round Island One and Flat Island Company subsidiaries as companies with unlimited liability. Unlimited companies have no obligation to file their accounts publicly.

The move to change the legal status of the subsidiaries follows a November 2005 report in The Wall Street Journal and weeks after the US Treasury Department said it was developing new rules to prevent US groups transferring intellectual property and patents abroad as a way of minimising their exposure to US tax.

Microsoft's effective global tax rate fell to 26 percent in its last fiscal year from 33 percent the year before. Nearly half of the drop was attributed to "foreign earnings taxed at lower rates," Microsoft said in a Securities and Exchange Commission August filing. Microsoft leaves much of its profit in Ireland, including $4.1 billion in cash, avoiding U.S. corporate income taxes. But it still can count this profit in its earnings.