[ Among the tech companies studied, Amazon "stands out as the
business with the poorest tax conduct," according to the U.K.-based
Fair Tax Mark.] [[link removed]]

NEW ANALYSIS DETAILS 'AGGRESSIVE' TAX DODGING OF SIX SILICON VALLEY
GIANTS—TOTALING OVER $100 BILLION  
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Jessica Corbett
December 2, 2019
Common Dreams
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_ Among the tech companies studied, Amazon "stands out as the
business with the poorest tax conduct," according to the U.K.-based
Fair Tax Mark. _

Close-up of sign with logo on facade of the regional headquarters of
e-commerce company Amazon in the Silicon Valley town of Sunnyvale,
California, Oct. 28, 2018. , (Photo: Smith Collection/Gado/Getty
Images)

 

Amazon, Apple, Facebook, Google, Microsoft, and Netflix have
collectively dodged over $100 billion in global taxes so far this
decade, according to an analysis released Monday by a U.K.-based tax
transparency campaign group.

Later this week, the Fair Tax Mark plans to publish its full report on
the tax conduct of the companies, entitled _The Silicon Six and Their
$100 Billion Global Tax Gap_. The report's key findings were detailed
[[link removed]] on
the group's website Monday.

"Our analysis of the long-run effective tax rate of the Silicon Valley
Six over the decade to date has found that there is a significant
difference between the cash taxes paid and both the headline rate of
tax and, more significantly, the reported current tax provisions,"
said the Fair Tax Mark chief executive Paul Monaghan. "We conclude
that the corporation tax paid has been much lower than is commonly
understood."

The Fair Tax Mark studied each company's annual filings in the United
States—where the tech giants are incorporated—as well as some
quarterly filings and accounts of subsidiaries over the period of
2010–2019. The group found that the collective global tax gap
between the expected headline rates and the cash taxes paid was $155.3
billion. The gap between the current tax provisions and cash taxes was
$100.2 billion.

"The report suggests that the bulk of the shortfall almost certainly
arose outside the United States, given that the foreign current tax
charge was just 8.4% of identified foreign profits," the group
explained. "Profits continue to be shifted to tax havens, especially
Bermuda, Ireland, Luxembourg, and the Netherlands."

The Fair Tax Mark determined that Amazon, whose CEO Jeff Bezos is
the richest [[link removed];] individual
in the world, "stands out as the business with the poorest tax
conduct" among the Silicon Six. The headline corporate tax rate in the
U.S. was 35% for most of the years studied, but the group found that
Amazon paid only $3.4 billion in income taxes—just 12.7% of
profit—during the analyzed period.

"The company is growing its market domination across the globe on the
back of revenues that are largely untaxed, and can unfairly undercut
local businesses that take a more responsible approach," the group
said, warning that "the situation is unlikely to reverse soon."

_The Guardian_ reported
[[link removed]] that
Amazon pushed back against the findings, saying that the report's
"suggestions are wrong" and the company had "a 24% effective tax rate
on profits from 2010–2018."

Facebook ranked as the second-worst offender, having paid just 10.2%
of its profit. Google, whose cash tax paid as a percentage of profit
was 15.8%, came in third. Netflix, in the fourth spot, "proved to be
the most difficult to rank," and had the same cash tax percentage as
Google.

Facebook told _The Guardian_ that "we take our tax obligations
seriously and pay what we owe in every market we operate. In 2018 we
paid $3.8bn in corporation tax globally and our effective tax rate
over the last five years is more than 20%."

"When multinational corporations abuse their tax responsibilities to
society, they weaken the supports that our economies need to work well
and create wealth."
—Alex Cobham, Tax Justice Network

Apple ranked fifth. The Fair Tax Mark pointed out that although Apple
"presents itself as 'the world's largest taxpayer' and it certainly
makes the largest tax contribution of the Silicon Six," the company's
cash tax paid as a percentage of profit was still just 17.1%.

"Microsoft, by a slim margin, has the least aggressive approach to tax
avoidance of the six," the tax group concluded. Microsoft was
co-founded by the world's second-richest
[[link removed];] individual, Bill Gates,
and "makes the second largest tax contribution of the Silicon Six,"
according to the analysis. The company's cash tax paid as a percentage
of profit was 16.8%.

The Fair Tax Mark's Monaghan said Monday that "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."

Monaghan noted that the Organization for Economic Cooperation and
Development (OECD) "is now leading multilateral efforts to address the
tax challenges from digitalization of the economy, and is looking to
ensure that profitable multinationals pay tax wherever they have
significant consumer-facing activities and generate their profits."

Alex Cobham, chief executive of the London-based advocacy group Tax
Justice Network, said that the group's new report "demonstrates why we
need a fundamental reprogramming of the world's approach to tax, based
on a unitary taxation."

Under a unitary taxation system
[[link removed]],
the global profits of multinational corporations would be allocated
across the countries where the companies actually conduct business,
which advocates argue would effectively make tax havens useless.

"When multinational corporations abuse their tax responsibilities to
society, they weaken the supports that our economies need to work well
and create wealth," said Cobham. "A unitary approach to tax means we
can finally make sure multinational corporations contribute tax based
on where they employ workers and do business, not where they rent
mailboxes and hide ledgers."

"By ensuring multinational corporations pay their fair share locally
for the wealth created locally by people's work—based on an agreed
formula and supplemented by a minimum effective tax rate—governments
can strengthen their economies to run smoothly and make a good life
possible for everyone," he added.

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