A new report from the Fair Tax Mark, The Silicon Six and their $100 billion global tax gap, examines the tax conduct of Facebook, Apple, Amazon, Netflix, Google and Microsoft over the last decade.
The report concludes that the corporation tax paid by these companies is much lower than is commonly understood. Over the period 2010 to 2019:
the gap between the expected headline rates of tax and the cash taxes actually paid was $155.3bn; and
the gap between the current tax provisions and the cash taxes actually paid was $100.2bn.
The report concentrates on information contained in Form 10-K annual filings in the US, where the companies are incorporated, and suggests that the bulk of the shortfall almost certainly arose outside the US.
The combined tax contingencies of the six companies have increased fourfold from $8.9bn at the end of 2010 to $47bn in 2019. They have also accrued a further $5.7bn in connected interest and penalties.
The report ranks the companies as follows in terms of poor tax conduct:
Amazon is the business with the poorest tax conduct, having paid just $3.4bn in income taxes this decade, representing 12.7% of profit, at a time when the federal headline rate of tax in the United States was 35% for seven of the eight years under examination;
Facebook paid tax at just 10.2% as a percentage of profit over the decade;
Google paid tax at 15.8% as a percentage of profit over the decade (despite claiming an overall global tax rate of over 23%);
Netflix paid tax at 15.8% as a percentage of profit over the decade;
Apple paid tax at 17.1% as a percentage of profit over the decade, although its tax contribution of $93.8bn is the largest of the six; and
Microsoft paid tax at 16.8% as a percentage of profit over the decade but has the least aggressive approach to tax avoidance of the six.
Chief Executive of the Fair Tax Mark, Paul Monaghan said: ‘The international tide is turning on the acceptability of corporate tax avoidance. The idea of countering the profit-shifting of Big Tech multinationals via the introduction of digital sales taxes has taken root in many countries. Investors need to look afresh at the future impact that this will have on company valuations and income flows.’
A new report from the Fair Tax Mark, The Silicon Six and their $100 billion global tax gap, examines the tax conduct of Facebook, Apple, Amazon, Netflix, Google and Microsoft over the last decade.
The report concludes that the corporation tax paid by these companies is much lower than is commonly understood. Over the period 2010 to 2019:
the gap between the expected headline rates of tax and the cash taxes actually paid was $155.3bn; and
the gap between the current tax provisions and the cash taxes actually paid was $100.2bn.
The report concentrates on information contained in Form 10-K annual filings in the US, where the companies are incorporated, and suggests that the bulk of the shortfall almost certainly arose outside the US.
The combined tax contingencies of the six companies have increased fourfold from $8.9bn at the end of 2010 to $47bn in 2019. They have also accrued a further $5.7bn in connected interest and penalties.
The report ranks the companies as follows in terms of poor tax conduct:
Amazon is the business with the poorest tax conduct, having paid just $3.4bn in income taxes this decade, representing 12.7% of profit, at a time when the federal headline rate of tax in the United States was 35% for seven of the eight years under examination;
Facebook paid tax at just 10.2% as a percentage of profit over the decade;
Google paid tax at 15.8% as a percentage of profit over the decade (despite claiming an overall global tax rate of over 23%);
Netflix paid tax at 15.8% as a percentage of profit over the decade;
Apple paid tax at 17.1% as a percentage of profit over the decade, although its tax contribution of $93.8bn is the largest of the six; and
Microsoft paid tax at 16.8% as a percentage of profit over the decade but has the least aggressive approach to tax avoidance of the six.
Chief Executive of the Fair Tax Mark, Paul Monaghan said: ‘The international tide is turning on the acceptability of corporate tax avoidance. The idea of countering the profit-shifting of Big Tech multinationals via the introduction of digital sales taxes has taken root in many countries. Investors need to look afresh at the future impact that this will have on company valuations and income flows.’
