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Microsoft May Repatriate $780 Million Under AJCA Tax Break

by Leroy Baker, Tax-News.com, New York

31 January 2005

Microsoft Corp revealed last week that it may repatriate up to $780 million in foreign earnings under the auspices of the American Jobs Creation Act.

In its second quarter report to the Securities and Exchange Commission, Microsoft stated that the repatriated money could result in a corresponding tax-provision benefit of approximately $179 million.

The tax break will apply to dividends paid either during the company’s fiscal years 2005 or 2006, the SEC report indicated.

Microsoft is the latest blue chip US firm to announce repatriation of foreign earnings under the AJCA tax break, following recent pledges by Johnson & Johnson and Eli Lilly to repatriate $11 billion and $8 billion respectively.

Microsoft last week announced record revenue of $10.82 billion for the quarter ended December 31, 2004, a 7% increase over the results in the same period of the previous year.

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