BEIJING, March 3 (Xinhua) — The “tax gap” of Silicon Valley’s six tech giants over the past decade has totalled more than $100 billion, according to a new study. Fair Tax Mark is a UK organisation that certifies good tax practices for businesses. The agency assessed global taxes on Facebook, Apple, Amazon, Netflix, Google and Microsoft between 2010 and 2019, and called the six companies “Silicon Valley’s Big Six.”
The study, released Monday, analyzed the companies’ 10-K documents, examined their tax reserves, the amount they set aside in their financial reports, and compared them to the taxes actually paid, or cash taxes. The gap between the tax reserves of Silicon Valley’s big six and the amount of tax they actually pay has reached $10.2 billion over the past decade, the researchers found.
The report notes that tax reviews of large companies tend to focus only on tax reserves, which are not always the amount of tax the government actually receives. The report also claims that profits continue to be “transferred to tax havens, particularly Bermuda, Ireland, Luxembourg and the Netherlands”.
The researchers say most of the tax shortfall is “almost all from outside the United States”, as foreign tax expenses account for only 8.4 per cent of the companies’ overseas profits over the past decade.
Paul Monaghan, chief executive of Fair Tax Mark, said there was a huge difference between the accounts of these companies and the actual tax they paid, “which actually pay $100bn less tax than reported in their accounts.” “
Amazon is the most serious violator of the six companies, the report said, and the home appliance giant has paid $3.4 billion in income taxes since 2010. Fair Tax Mark points out that in the past decade, the company paid cash tax equivalent to only 12.7 per cent of its profits. But in seven of the years covered by the survey, the U.S. corporate tax was 35 percent. Until the end of 2017, U.S. President Donald Trump cut the corporate tax rate from 35 percent to 21 percent.
“The company is expanding its market dominance globally, and the revenue behind it is essentially tax-free and could unfairly affect local businesses that take a more responsible approach,” the report said. “
In 2018, Amazon’s revenue reached $232.9 billion, giving it a market capitalization of about $892 billion. In an emailed statement, an Amazon spokesman said the statement in the Fair Tax Mar report was false.
“Amazon accounts for about 1 per cent of global retailing and we have bigger competitors in all the markets we operate, with an effective tax rate of 24 per cent on profits for 2010-2018,” the company said. “
According to Fair Tax Mark, Facebook has the second-highest “tax gap” in the past decade, behind Amazon. The company pays only 10.2 per cent of its profits over the past decade, the lowest proportion of the “Silicon Valley’s big six,” the researchers said. Fair Tax Mar points out that Facebook also pays the lowest of the six companies overseas, accounting for only 5 per cent of its overseas profits.
Google’s “tax gap” came in third place, reporting that its total tax bill over the past 10 years was equivalent to 15.8 per cent of profits, compared with 7.1 per cent for overseas tax rates.
Naofi was fourth with 15.8 percent tax rate over the past 10 years, Apple was fifth with 17.1 percent and Microsoft was sixth with 16.8 percent.