New accounts show that Microsoft Ireland Operations Limited recorded an increase in profits in the year to June 30th 2014, making a pretax profit of $1.4bn - up from $1.3 in 2013.
Growth driven by the company's cloud services and devices led to a 15 percent increase in the subsidiary's turnover - coming to $22.2bn.
Irish Times report that Microsoft's Irish operations paid an effective corporate tax rate of close to 14.4 percent - with a tax bill coming to €204m.
Staff numbers increased during the year - the tech giant employs 735 people in Ireland. The company announced in October of last year that it plans to recruit 100 more employees, mainly through graduate and internship programmes.
The company's CEO, Satya Nadella has promises that the company will move to become less reliant on its traditional core products like the Windows OS and its MS Office suite.
He has previously warned: "Our industry does not respect tradition. It only respects innovation."
Microsoft has acquired Mojang, maker of the popular Minecraft video game. It is also investing virtual reality technology, new tools to aid businesses, and cloud and mobile programmes.
