The world’s largest technology companies, known as the “Silicon Six,” have paid nearly $278 billion less in corporate income tax over the past ten years than would be expected based on the average statutory tax rate for U.S. companies, according to a new report by the Fair Tax Foundation (FTF).
TechSpot reports that a recent analysis conducted by the Fair Tax Foundation (FTF) has reignited the debate over how much tax the world’s largest technology companies pay. The report reveals that the so-called “Silicon Six” – Amazon, Apple, Google parent Alphabet, Meta, Microsoft, and Netflix – have collectively avoided paying $278 billion in corporate income tax over the past decade.
The FTF scrutinized the financial records and tax strategies of these digital giants, whose combined market capitalization now exceeds $12.9 trillion, making them more valuable than the entire FTSE 100 and Euro Stoxx 50 indices combined. According to the report, the Silicon Six generated $11 trillion in revenue and $2.5 trillion in profits over the last ten years. However, their average effective corporate tax rate was just 18.8 percent, significantly lower than the U.S. average of 29.7 percent and the global average of 27 percent during the same period.
The report highlights that these companies have inflated their reported tax payments by $82 billion by including tax contingencies – amounts set aside for potential future tax liabilities that they do not expect to pay. When excluding one-off repatriation tax payments related to historical tax avoidance, their effective rate drops even further to 16.1 percent.
Paul Monaghan, chief executive of the Fair Tax Foundation, argues that tax avoidance remains “hardwired” into these firms’ business models. The companies employ aggressive tax practices, such as booking profits in low-tax jurisdictions and leveraging tax breaks like the US Foreign-Derived Intangible Income (FDII) deduction, which allows them to pay as little as 13 percent tax on certain overseas profits. The FDII has been particularly lucrative for the Silicon Six, yielding $12 billion in tax relief in 2024 alone and totaling $30 billion over the past three years.
The FTF’s report ranks Amazon as having the “worst tax conduct,” citing its profit-shifting practices, such as booking a significant portion of its UK income in Luxembourg, a low-tax jurisdiction. However, Amazon’s average corporate tax rate over the decade was 19.6 percent, higher than Netflix (14.7 percent), Meta (15.4 percent), and Apple (18.4 percent). Microsoft paid the highest rate at 20.4 percent.
The report also draws attention to the growing gap between the taxes these companies actually pay and what is reported in their financial statements. Over the decade, the difference between headline tax rates and cash taxes paid reached $277.8 billion, while the gap between reported tax provisions and cash taxes paid was $82.1 billion.
In response to the report, representatives from Amazon, Meta, and Netflix emphasized their compliance with existing tax laws and regulations. They highlighted their significant investments in jobs and infrastructure, arguing that these, combined with low-profit margins, naturally result in a lower cash tax rate.
The influence of the Silicon Six extends beyond their financial might, with the companies spending $115 million lobbying governments in the United States and the European Union in 2024 alone. Their tax strategies are drawing increasing scrutiny from policymakers worldwide, prompting a patchwork of responses such as digital services taxes in countries like the UK, France, Austria, and Turkey.
Read more at TechSpot here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
