Researchers said Amazon, Facebook, Alphabet (the owner of Google), Netflix, Apple and Microsoft — known as the “Silicon Six” — are adept at reducing their tax liabilities by shifting profits to offshore tax havens.
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Bolstering demands for a global minimum tax to rein in corporations’ evasive tactics, a new analysis released last week showed that a half dozen companies based in the U.S. paid almost $100 billion less in taxes over the past decade than stated in their annual reports.
Between 2011 and 2020, Amazon, Facebook, Alphabet (the owner of Google), Netflix, Apple, and Microsoft — known as the “Silicon Six” — paid roughly $219 billion in income taxes, which amounts to just 3.6% of their more than $6 trillion in total revenue, according to the Fair Tax Foundation. Income tax is paid on profits, not total revenue, and researchers said these tech giants are adept at reducing their tax liabilities by shifting profits to offshore tax havens.
Had the “Silicon Six” paid the prevailing tax rates in the countries in which they operate, they would have given global tax authorities over $149 billion more than they did over the past decade, researchers said. Moreover, not only did these corporate behemoths fork over nearly $150 billion less than would be expected under a stronger international taxation regime, but they also inflated the value of the tax payments they did make.
According to the Fair Tax Foundation, these six companies reported paying approximately $315 billion in income taxes between 2011 and 2020, which is 23.2% on nearly $1.4 trillion in profits. That’s significantly higher than the 16.1% rate the companies actually paid over the past decade, however, resulting in a gap of more than $96 billion between tax figures cited in annual financial reports and real contributions to public revenues.
Paul Monaghan, chief executive of the UK-based nonprofit, said the study provided “solid evidence that substantive tax avoidance is still embedded within many large multinationals and nothing less than a root-and-branch reform of international tax rules will remedy the situation.”
None of the six corporations “is an exemplar of responsible tax conduct,” the report noted.