Silicon Six accused of $278 billion tax evasion over past decade

LONDON, UNITED KINGDOM: The major American technology companies collectively known as the “Silicon Six” have been accused of significantly underpaying corporate income tax by nearly $278 billion (£211 billion) over the past decade compared to the standard tax rate for US firms earning similar profits.

The companies involved—Amazon, Meta, Alphabet, Netflix, Apple, and Microsoft—generated a staggering $11 trillion in revenue and $2.5 trillion in profits over the last ten years.

According to a report by the Fair Tax Foundation (FTF), these companies contributed an average of 18.8 percent in combined national and federal corporate taxes, compared to an average of 29.7 percent for US corporations. When excluding one-time repatriation tax payments linked to past tax avoidance, the average corporate income tax contribution of the six firms dropped to just 16.1 percent over the decade. Additionally, the analysis uncovered that the companies overstated their tax obligations by $82 billion by including contingency amounts for taxes they did not anticipate needing to pay.

Paul Monaghan, the CEO of the FTF, stated, “Our analysis indicates that tax avoidance is deeply embedded in corporate structures.” He remarked that the tax contributions of the Silicon Six, in percentage terms, are significantly lower than those of other sectors like banking and energy in various parts of the world. He criticized their “aggressive tax practices,” including the use of contingency tax positions, and highlighted the immense political and economic influence these companies wield, as evidenced by their hefty lobbying expenditures.

This report arrives amid growing concerns about the influence of US tech companies, particularly showcased by the presence of their leaders—such as Amazon’s Jeff Bezos, Apple’s Tim Cook, and Meta’s Mark Zuckerberg—at Donald Trump’s second inauguration.

Global tech giants to establish regional HQs in Riyadh

Reports also suggest that discussions with the UK about securing lower tariffs on US product exports have centred around significant tax cuts for these companies.

The FTF noted that much of the revenue generated by the Silicon Six overseas is subject to lower corporate tax rates in the US due to tax breaks for foreign-derived intangible income. Moreover, international sales often benefit from lowered tax rates influenced by lower profit margins and profit reporting in tax-friendly jurisdictions.

Among the Silicon Six, Netflix reported the lowest effective tax rate of 14.7 percent based on profits recorded, while Microsoft’s effective rate was 20.4 percent. The FTF pointed out that Amazon exhibited the poorest tax conduct, considering factors such as total tax payments and apparent profit shifting, including routing a considerable amount of its UK earnings through low-tax Luxembourg. Nonetheless, Amazon’s corporate tax rate was noted at 19.6 percent, higher than those of Netflix (14.7 percent), Meta (15.4 percent), and Apple (18.4 percent).

An Amazon spokesperson defended the company’s practices by stating that its UK retail revenues, expenses, profits, and taxes are accurately recorded and reported to HM Revenue and Customs. They noted, “Governments create tax laws, and Amazon complies by fulfilling its tax obligations while also investing significantly in job creation and infrastructure.”

While a representative from Meta remarked, “We adhere to international and local tax regulations, ensuring we meet all tax requirements in countries where we operate.” Similarly, Netflix expressed that it follows all relevant tax rules in each country it operates.