Silicon Valley giants’ $100bn ‘tax shortfall’
SIX of the biggest US tech companies have dodged paying more than $100bn (£77bn) of corporation tax since 2010, a major study has claimed.
Analysis by the Fair Tax Mark group found there was a huge ‘tax gap’ between the amount Facebook, Amazon, Apple, Netflix, Google and Microsoft say they are paying in relation to their profits and the amount that is actually handed over to governments.
It estimated the companies should have paid £260bn of corporation tax between 2010 and 2019, based on US headline tax rates of 35pc until 2018, and between 10pc and 21pc since then. But by analysing company filings in the US and Europe, they found the so-called Silicon Six paid a far smaller amount – around £139bn.
retail giant Amazon, run by Jeff Bezos (pictured far right), paid just £2.6bn of tax over the decade so far. This is equal to 12.7pc of its profit.
Facebook, meanwhile, run by founder Mark Zuckerberg (pictured below left) handed over taxes worth 10.2pc of its profit, Google paid 15.8pc, Netflix 15.8pc, Apple 17.1pc and Microsoft 16.8pc.
The Fair Tax Mark believes a lot of the corporation tax shortfall ‘almost certainly’ comes from outside the US, such as through the use of tax havens for overseas operations. The organisation, which runs an accreditation scheme for companies’ tax payments, identified Bermuda, Ireland, Luxembourg and the Netherlands as among the tech titans’ favoured havens.
Fair Tax Mark chief executive Paul Monaghan said: ‘We conclude the corporation tax paid has been much lower than is commonly understood.’
The Fair Tax Mark’s analysis focused on the amount paid to governments and excluded factors the companies use to calculate taxes – or their ‘effective tax rate’ – on their stock market filings. These include money that has been set aside that could be used on taxes at some future point, known as deferred tax charges.
An Apple spokesman said: ‘We pay all that we owe according to tax laws and local customers wherever we operate.’ Amazon said it had an effective tax rate of 24pc between
2010 and 2018.