Microsoft’s Irish profits rise

Profits at Microsoft’s Irish subsidiary rose in 2012, as revenues climbed to €13.7 billion.

In accounts filed with the Companies Office, Microsoft Ireland Operations Limited (MIOL) revealed that pretax profit almost doubled to more than €1 billion in the year ending June 30th, 2012.

That was before the company released its new Windows 8 operating system. It is understood that the rise in revenues was driven by increased demand for cloud services, such as the company’s Office 365 product.

MIOL is responsible for selling software, including Windows and Office, in about 120 countries throughout the world. It employs 668 people in Ireland, with a payroll bill of just over €89 million.

Administrative cuts
The company cut its administrative expenses compared to the prior year, racking up €11.19 billion in costs.

Also lifting profit was the foreign exchange effect. Although the dollar-euro exchange rate had negatively impacted Microsoft the previous year, exchange rate volatility in the 12-month period ending June 2012 worked in the company’s favour.

Corporation tax
However, its corporation tax bill, at €132 million, almost doubled compared with 2011, with the firm paying above the 12.5 per cent standard rate. It attributed this to a number of reasons, including depreciation that exceeded capital allowances and incurring non-deductible expenses.

Directors noted the ongoing challenges in the economic environment, but said the company showed a “strong performance” during the year.

MIOL paid a dividend of €4.95 billion in 2012, and subsequently paid €113 million to shareholders.

Microsoft Ireland did not comment on the accounts.

MIOL, which sells, distributes and markets software globally from Dublin, is just one of the software giant’s Irish subsidiaries. Its operations here also include the unlimited company Microsoft Ireland Research, which carries out research and development activities in Dublin; Flat Island Company, which licenses Microsoft software for use in Europe, the Middle East and Africa; and Round Island One, a vehicle for research internationally. Unlimited companies do not have to file public accounts.

Microsoft employs more than 1,200 staff at its Dublin operation.

It is currently planning a move to a new campus-style Irish headquarters, bringing its staff under one roof.