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Microsoft believed to be company levied $137M in China tax case

A company identified only as "M" in a China news story owes $137 million for back taxes, according to a report.

A company with a name that starts with "M" is in some tax trouble in China. It's likely Microsoft. Microsoft

Microsoft may have been asked earlier this year to pay nearly $140 million for back taxes, a new report out of China claims.

China's official news outlet, Xinhua, published a story this week saying that a foreign organization with a name starting with "M" has been levied $137 million for back taxes and interest. While the name isn't much to go on, Xinhua provided other information on the company, including that it's one of the world's largest 500 companies and established a wholly owned subsidiary in Beijing in 1995. According to Reuters, which earlier reported on the story, the only company that fits the entire description is Microsoft.

It's not clear why China's official news agency wouldn't specify the company's name, and it's important to note that neither the government nor the Windows maker has confirmed the situation.

Microsoft did not immediately respond to CNET's request for comment

According to Xinhua, "M" officially posted major losses over the last six years. In some countries that would be sufficient information for tax authorities, but China investigated other companies in the industry, which posted profits over the same period. The government then decided that losses didn't make sense given the competitive market and decided to demand back taxes. Xinhua also said that "M" agreed to pay the amount, according to Reuters.

In a statement to Reuters, Microsoft said that it has been consistently paying taxes to China in accordance with a deal it signed with China's tax authorities in 2012. That deal defined how Microsoft would be taxed on the way it shifts sales among its many subsidiaries around the world.