Software giant claims it "pays all due taxes", despite paying nothing on £1.7 billion revenue.
Microsoft is the latest tech firm to be accused of tax dodging after it was revealed the Microsoft Ireland Operations subsidiary did not pay any tax on revenues of £1.7 billion.
Redmond has released a succinct statement claiming that it abides by all the necessary laws.
“Microsoft pays all due taxes, as required by law, worldwide. Microsoft subsidiaries are fully subject to tax in the jurisdictions in which we operate," a spokesperson noted in a statement.
"We are regularly audited by major tax jurisdictions, which ensure the company is complying with all rules and regulations."
According to a report in The Sunday Times, Microsoft is said to be channeling online payments for sales of Windows 8 to Luxembourg so it can avoid paying tax in the UK.
Amazon and Google have already been in the spotlight regarding small tax payments in the UK.
Amazon made a profit of £74 million in the UK during 2011 and paid £1.8 million in Corporation tax. Meanwhile, web-giant Google generated an annual turnover of £396 million and paid just £6 million to the Exchequer.
Microsoft could come under increasing pressure to pay tax as it finds itself in a similar position to popular coffee firm Starbucks. The US chain generated revenues of £398 million in UK last year, but paid no tax.
After negative publicity, Starbucks said that it would contribute a significant amount in 2013/14, aiming to pay £10 million in each tax year.