The Silicon Six and their $100 billion global tax gap
The report examined the tax conduct of Facebook, Apple, Amazon, Netflix, Google and Microsoft in the ten years since 2009 and, not unexpectedly, found evidence of industrial-scale tax avoidance.
Researchers, however, found that the corporation tax paid had been even lower than was commonly understood. The gap, for example, between the current tax provisions (the amount the companies were expected to pay) and the corporation tax actually paid was $100.2bn. All were found to be shifting profits to tax havens, especially Bermuda, Ireland, Luxembourg and the Netherlands.
The report, called ‘The Silicon Six and their $100 billion global tax gap’, was published by Fair Tax Mark, the campaigning certification scheme for good tax conduct established in Manchester in 2013 with help from Ethical Consumer
Amazon the top tax avoider in the Silicon Six
Amazon was found to be the worst culprit and had paid just $3.4bn in corporation taxes in the last decade, whilst Apple had paid $93.8bn and Microsoft had paid $46.9bn.
This is a staggering variance, especially as Amazon’s revenue over this period exceeded that of Microsoft’s by almost $80bn. Fair Tax Mark said this means Amazon’s effective tax rate was just 12.7% over the decade when the headline tax rate in the US has been 35% for most of that period.
Ethical Consumer has been calling for a boycott of Amazon since 2013. We argue that its systematic avoidance of tax means, amongst other things, that it is able to undercut other more ethical retailers in multiple sectors leading to the closure of many smaller businesses. This in turn further reduces the tax revenue that governments can raise to spend on poorer and more vulnerable members of the communities that Amazon operates in.
Chief Executive of the Fair Tax Mark, Paul Monaghan:
“Our analysis of the long-run effective tax rate of the Silicon Valley Six over the decade to date has found that the corporation tax paid has been much lower than is commonly understood.”
Campaigners have also long been pushing for a change in international accounting practice to help bridge this tax gap. Alex Cobham, Chief Executive, Tax Justice Network, said:
“This report demonstrates why we need a fundamental reprogramming of the world’s approach to tax, based on a unitary taxation. 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”