Microsoft and HP rapped by US Senate over tax havens

The US Senate has criticised Microsoft and Hewlett-Packard for their use of tax avoidance schemes, which it says is rampant in the tech sector.

The Senate's Permanent Subcommittee on Investigations said the companies used places such as the Cayman Islands so they did not have to pay US taxes.

The chairman of the panel said their practices ranged from "egregious to dubious validity".
Microsoft and HP denied any wrongdoing.

Carl Levin has been investigating offshore tax havens for years.

He said the industry was probably the number one user of these offshore entities to transfer intellectual property.

Five of the top 10 companies with the biggest offshore cash balances are in the technology sector.