‘Silicon Six’ tech giants accused of inflating tax payments by $100 billion

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The giant US tech firms known as the “Silicon Six” have been accused of inflating their stated tax payments by almost $100bn (£70bn) over the past decade.

As Chancellor Rishi Sunak called on world leaders to back a new tech tax ahead of next week’s G7 summit in the UK, a report by the campaign group Fair Tax Foundation singled out Amazon, Facebook, Google’s owner, Alphabet, Netflix, Apple and Microsoft.

It said they paid $96bn less in tax between 2011 and 2020 than the notional taxation figures they cite in their annual financial reports. .

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The six firms named handed over $149bn less to global tax authorities than would be expected if they had the paid headline rates where they operated, Fair Tax Foundation said.

Multinationals exploit gaps and mismatches in the international tax system through a technique known as “profit-shifting”. This involves artificially allocating sales derived in one country to a lower-tax country. One of the ways this is achieved is by companies setting up a subsidiary in a tax haven and registering their intellectual property there. That entity then charges the company’s subsidiaries in other, higher-tax jurisdictions large royalty fees. By charging that “cost” to the market where the majority of revenues are made, profits can be reduced or eliminated, meaning no tax is paid. The royalty fees extracted in this way are booked as profit in the low-tax location. Profits are often shifted to countries such as the British Virgin Islands or Bermuda, which charge no corporation tax.

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ca.finance.yahoo.com/news/silicon-six-tech-giants-accused-070116735.html

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