The major American technology firms known as the “Silicon Six” have been accused of paying almost $278 billion less in corporate income tax over the past decade compared with the standard rate for US companies with similar profits.
Amazon, Meta, Alphabet, Netflix, Apple and Microsoft generated $11 trillion of revenue and $2.5 trillion of profits over the past 10 years, according to a report by the Fair Tax Foundation (FTF).
The analysis found these tech giants paid an average of just 18.8 per cent in combined national and federal corporation taxes, significantly below the average 29.7 per cent rate in the US during this period.
Paul Monaghan, chief executive officer of the FTF, said: “Our analysis would indicate that tax avoidance continues to be hardwired into corporate structures. The Silicon Six’s corporate income tax contributions are, in percentage terms, way below what sectors such as banking and energy are paying in many parts of the world.”
The report claims the companies’ tax practices have become increasingly aggressive, with their reported uncertain tax positions more than tripling over the past decade, rising from $24.8 billion in 2015 to $82.5 billion in 2024.
If one-off repatriation tax payments related to historical tax avoidance were excluded, the average corporate income tax contribution of the six firms would fall further to 16.1 per cent over the decade.
Netflix emerged as having the lowest tax rate paid at 14.7 per cent of profits, while Microsoft had the highest at 20.4 per cent. However, the FTF ranked Amazon as having the worst overall tax conduct due to “obvious profit shifting” practices.
A spokesperson for Amazon defended the company’s approach, stating: “Governments write the tax laws and Amazon is doing the very thing these laws encourage companies to do – paying all taxes due while also investing billions in creating jobs and infrastructure.”
Meta also responded, saying: “We follow international and local tax rules, ensuring that we pay all taxes required in each of the countries where we operate.”
The report highlights how much of the Silicon Six’s overseas revenue benefits from low tax rates through the US Foreign-Derived Intangible Income tax break, which has been worth $30 billion to these companies over just the past three years.
The FTF recommends that the US should end this tax break and embrace the OECD’s 15 per cent Global Minimum Tax, while other countries should consider measures to ensure fairer tax contributions from these tech giants.
The report comes as the influence of these tech companies has been highlighted by the presence of their senior executives at Donald Trump’s second inauguration, with tax cuts for such firms reportedly featuring in UK-US trade discussions.
