Is Microsoft following Apple into the 'Irish tax deal' doghouse?

Avoiding paying €127m annually and the UK aren't pleased...

The Sunday Times has challenged Microsoft's UK tax bill, as not only the Washington-based multinational but also the British government comes in for criticism regarding its current tax arrangement.

The latest edition of the newspaper puts the spotlight on the fact that Microsoft is one of 142 companies who have "advance pricing agreements" in place with the HM Revenues & Customs tax collection service.

According to the article, Microsoft's deal, which runs between 2011 and 2017, "designated the allocation of profits between Britain and Ireland."

Essentially this means the company has been booking sales through Ireland to take advantage of our corporation tax, which stands at 12.5% compared to the UK's 20% rate.

The Sunday Times' investigation alleges that the company has sent over £8bn of revenues purchased by British shoppers through Ireland.

As a result, it has reportedly been avoiding a potential €127m (£100m) tax bill annually.

Facebook faced similar pressure earlier this year, with the social networking titan deciding in March to stop routing UK sales through Ireland and to provide greater "transparency".

Google also agreed to pay the British exchequer £130m in back taxes in early 2016, though many quarters criticised this amount as insufficient.

Meanwhile, Apple is undergoing a European Commission probe into its tax affairs.

Brussels has argued that its tax arrangements were improperly designed to give it a financial boost in return for jobs. A decision on whether or not it can be classified as State aid is expected in July. Both Apple and the Irish Government have firmly stated that they do not have a case to answer.