Major tech companies dodging taxes is as cliché as major tech companies flaunting privacy commitments. Still, knowing that this does happen makes it no less shocking when faced with the reality of it happening. So, an accusation that the so-called “Silicon Six” tech giants have inflated tax payments to the tune of $100bn over 10 years is interesting.
Before continuing, it is worth pointing out accusation remains an important word here. Certainly, I expect the Silicon Six companies to hit back at this and the situation could rumble on.
If you are unfamiliar with the term, Silicon Six, it references the six biggest tech giants in the United States. Namely, they are (in no order) Netflix, Apple, Alphabet (Google), Facebook, Amazon, and Microsoft.
As we move closer to next week’s G7 summit in the United Kingdom, a report by the Fair Tax Foundation is pointing fingers at the companies. British Chancellor Rishi Sunak will appeal to world leaders at the summit to push through a new tax on tech companies following the report.
According to the Fair Tax Foundation, the companies have paid $96bn less than they should have in tax between 2011 and 2020. The report says there are clear discrepancies in the paid taxes and taxation figures in financial reports.
Globally the Silicon Six have paid $149bn less than they should have if basing payments on headline rates. In total, the companies paid $219bn during those years, which amounts to just 2.6% of their collective revenue during that time ($6 trillion). The report suggests the major tech companies move their revenue to low-tax regions to avoid making payments.
Paul Monaghan, chief executive of the Fair Tax Foundation, says the report has “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”.
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