MICROSOFT has reached an undisclosed settlement with the Australian Taxation Office believed to be worth hundreds of millions of dollars.

Earlier this year, The Daily Telegraphreported the ATO had hit seven publicly listed companies with tax bills of between $250 million and $800 million after extensive audit processes.

It’s understood Microsoft, Rio Tinto, BHP Billiton, Apple and Google were among the companies targeted to recoup almost $3 billion in tax believed to be owed by multinationals.

Microsoft officially reached an agreement with the tax office this morning which ended the audit process, Microsoft’s Corporate Vice President of Worldwide Tax Daniel Goff told an Australian senate inquiry into corporate tax avoidance today.

He asked that the details of the settlement only be disclosed to the committee in a confidential submission, to avoid tipping off corporate competitors.

It comes after Rio Tinto confirmed earlier this year that the ATO had issued it with amended tax assessments requiring it to pay an extra $447 million.

Mr Goff said while the company did not have a formal Advance Pricing Arrangement with the tax office, it had agreed on an amount Microsoft was likely to earn and the likely income tax payable until 2022.

Apple’s managing director Tony King told the inquiry today that the ATO had concluded its five-year audit into Apple earlier this year and imposed no penalty.

The ATO found Apple’s taxes were up to date, he said, and the company was committed to keeping authorities abreast of any changes in future.

“There are no issues of dispute between Apple and the ATO,” Mr King said.

Google and Facebook will also face the inquiry, which is looking at tax avoidance and minimisation by multinationals operating in Australia.

It’s seeking to find out whether Australia’s current tax laws are adequate and companies are complying with existing laws.

The inquiry is running at the same time the ATO has conducted audits into 59 multinational corporations to ensure compliance with Australia’s taxation laws.

Mr King said Apple had a straightforward business model in Australia, insisting the company recorded all its transactions and revenue locally.

New laws targeting multinational tax avoidance would have no impact on Apple’s business model, he said.

Apple paid an effective tax rate of 26 per cent globally, he said, and was among the top 50 corporate taxpayers in Australia.

“We are a compliant taxpayer everywhere that we operate in the world,” Mr King said.

He said over the five years the audit was conducted, Apple paid $630 million of tax in Australia, including $120 million in 2016.