Tech giants, the 'Silicon Six', over inflate tax payments by $100 billion
Six tech giants, Amazon, Apple, Facebook, Alphabet (owner of Google), Microsoft and Netflix, paid $96 billion less in tax between 2011 and 2020. They have been accused of inflating their stated tax payments by almost $100 billion less than they stated in their annual financial reports. According to the Fair Tax Foundation, the six companies paid $149 billion less in global tax during the last decade, $96 billion less than the figure they should have paid if they had been taxed at the headline rate where they operated.
In total, the 'Silicon Six' have only paid $219 billion in tax over the last decade, which is just 3.6% of their total revenue of $6 trillion. With income tax based on their profits, not revenues, these companies have simply moved their profits to off-shore tax havens, to pay less tax. These companies have been very adept at moving their money around and as a result, there is now a call to introduce a minimum tax to rein in corporations' evasive tactics.
According to the Fair Tax Foundation records, Amazon is the worst offender, who has paid only $5.9 billion over the last decade with Facebook in second place. The Fair tax Foundation's analysis of the six offenders comes just a few weeks after the US Internal Revenue Service Commissioner, Charles Rettig, said that tax dodging was depriving the US government of as much as $1 trillion each year.
The Biden administration is proposing a global tax reform that 'would see many incentives underpinning profit-shifting to tax havens removed, and would see the largest multinationals taxed not not on where their subsidiary profits are booked, but where real economic value is derived', as stated by Paul Monaghan, Chief Executive of the Fair Tax Foundation.
“This would have a seismic impact on the likes of Amazon, Apple, Facebook, Google, and Microsoft (who have tax dodging hard-wired into their organisational structure), with billions of additional taxes paid across the world,” Monaghan continued in his statement.
“We could be on the cusp of a once-in-a-generation moment,” he added, “but world leaders at the forthcoming G7 and G20 world leader summits need to grasp the nettle, step up, and engage with the agenda much more positively—the benefit to public services across the world could be immense.”
The US government's proposal to reform the global tax system must impose a minimum of 15% corporation tax on companies that would help end "profit-shifting to tax havens".
With the G7 summit next week in Cornwall, south west England, the subject of a global tax plan could get the green light prior to the summit. Chancellor Riski Sunak wants to sit down with President Joe Biden's administration to sign up to a tech tax deal (a proposed 15% tax) that would it make it fair to all companies who pay tax and those that don't pay enough to pay a minimum uniform rate.