Six companies representing Silicon Valley in the U.S. have reportedly evaded tax for the past ten years. The Silicon Valley “tax gap” recorded is more than $100.2 billion in total.
Citing a report published by Britain’s Fair Tax Mark, CNBC reported that the size of “Tax Gap” by Facebook, Apple, Amazon, Netflix, Google, and Microsoft totaled $100.2 billion from 2010 to this year.
Fair Tax Mark is the organization that organizes the UK’s “Between Tax Companies”. Tax Gap means the difference between the taxes actually collected and the amount of money that taxpayers should pay.
The Fair Tax Mark calculated the “Tax Gap” by comparing the amount of taxes counted on the companies’ accounting documents and the amount of taxes actually paid, according to CNBC.
Most of the tax gaps in these companies have occurred overseas and moved to tax-avoidance areas. These areas include Bermuda, Ireland, Luxembourg, and the Netherlands.
In the case of Amazon, income taxes spent during the period surveyed stood at $3.4 billion. Accounting for only 12.7 percent of its revenue, the largest tax gap among the six companies. Facebook followed Amazon in terms of taxes it actually paid over the past decade. Accounting for only 10.2 percent of its revenue.
Silicon Valley companies: there’s no tax gap
However, all of the companies refuted the report. Apple claims itself as the largest taxpayers in the world. While Google said that today’s complicated international tax system might cause this confusion.
Citing a spokesperson of Facebook, CNBC reported:
“In 2018 we paid $3.8 billion in corporation tax globally and our effective tax rate over the last five years is more than 20%. Under current rules we pay the vast majority of the tax we owe in the U.S. as that is where the bulk of our functions, assets and risks are located. Ultimately these are decisions for governments and we support the OECD process which is looking at new international tax rules for the digital econom.”
While Amazon stated,
“Amazon is primarily a retailer where profit margins are low, so comparisons to technology companies with operating profit margins of closer to 50% is not rational. Governments write the tax laws and Amazon is doing the very thing they encourage companies to do — paying all taxes due while also investing many billions in creating jobs and infrastructure. Coupled with low margins, this investment will naturally result in a lower cash tax rate.”
