America’s tech giants have been accused of paying nearly $278bn less in corporate income tax over the last decade compared to the 10 years prior.
New research from the non-profit Fair Tax Foundation (FTF) calculates that the so-called “Silicon Six” – Alphabet, Amazon, Apple, Meta, Microsoft and Netflix – generated a combined $11tn of revenue and $2.5tn of profits over that time period.
However, the same six paid an average of 18.8 percent in combined national and federal corporation taxes, compared to the average rate for companies operating in the United States, which is 29.7 percent.
That percentage falls even lower to just 16.1 percent if one-off repatriation payments in the U.S. connected to historical tax avoidance are excluded.
“Our analysis would indicate that tax avoidance continues to be hardwired into corporate structures,” said the FTF’s chief executive Paul Monaghan.
“The Silicon Six’s corporate income tax contributions are, in percentage terms, way below what sectors such as banking and energy are paying in many parts of the world.”
According to the foundation’s analysis, Netflix recorded the lowest rate of tax paid compared with profit booked, at 14.7 percent, followed by Meta at 15.4 percent, Amazon at 19.6 percent, and Microsoft at 20.4 percent.
Monaghan warned of the “enormous political influence as well as economic power” the Big Tech behemoths now wield, illustrated by the likes of Jeff Bezos, Mark Zuckerberg, and Tim Cook attending Donald Trump’s inauguration in January and making friendly overtures to the president since his election win in November.
While Tesla CEO Elon Musk’s proximity to the president is well documented.
Monaghan explained that much of the sextet’s overseas revenue was subject to lower corporate income tax rates in America because of a tax break for foreign-derived intangible income.
Their overseas sales are also benefiting from reduced rates accessed by a combination of lower profit margins and by their making profits in low-tax destinations such as Luxembourg, Monaghan added.
“We follow international and local tax rules, ensuring that we pay all taxes required in each of the countries where we operate,” a Meta spokesperson told The Independent.
“The suggestions in this report are extremely misleading,” an Amazon spokesperson told The Independent.
“Tax is paid on profit not revenue. Amazon is primarily a retailer with low-profit margins, so comparisons to technology companies with much higher operating profit margins are deeply flawed.
“Governments write the tax laws and Amazon is doing the very thing these laws encourage companies to do — paying all taxes due while also investing billions in creating jobs and infrastructure.
“Since 2010, we have invested more than $1.2tn in the U.S. and over €250bn in Europe.
“Coupled with low margins, this investment will naturally result in a lower cash tax rate, particularly when measured as a percentage of revenue.”
A Netflix spokesperson said: “Governments determine tax rules and rates – and companies comply with them.
“Netflix complies with the relevant tax rules and regulations in every country in which we operate.”
The Independent has contacted Alphabet, Apple and Microsoft for further comment.