Who are "Silicon Six" and how they Evaded 100 Billion in Tax?

Alan Joseph Alan Joseph
Jun 1, 2021 6 min read
Who are "Silicon Six" and how they Evaded 100 Billion in Tax?

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The Silicon Six tech giants have been accused by the fair tax foundation for inflating the tax payments by almost USD 100 billion. It was found that during the year 2011 to 2020 the firms have paid less in tax than the national figures mentioned on their annual reports. In this article letโ€™s look at What is "Silicon Six" and how they Evaded 100 Billion in tax?

Silicon Six โ€“ Latest News
The claim on Silicon Six by Fair Tax Foundation
Total Tax paid by the Silicon Six
Did Amazon Evade Taxes?
Amazonโ€™s Reply to the claim
Did Facebook Evade Taxes?
Facebook's Reply to the claim
What is a Tech Tax Deal?
FAQ

Silicon Six โ€“ Latest News

Silicon Six is the US based tech giants which include Amazon, Facebook, Googleโ€™s parent company Alphabet, Netflix Apple and Microsoft. They include the largest companies in the Silicon Valley. These companies have been accused of inflating the tax payments of almost USD 100 billion for the past decade.

The claim on Silicon Six by Fair Tax Foundation

A report by the campaign group Fair Tax Foundation ahead of the G7 Summit in the UK where chancellor Rishi Sunak has called on the world leaders to back a new tech tax before the G7 Summit have found that the tech companies which include Amazon, Facebook, Googleโ€™s parent company Alphabet, Netflix, Apple and Microsoft have paid USD 96 billion less in tax for the year 2011 to 2020.

It is claimed that the companies have paid less amount of tax when compared to the national taxation figures they have shown in their financial annual reports.

Total Tax paid by the Silicon Six

Fair Tax Foundation has conveyed that the six tech firms have paid USD 149 billion less to global tax authorities than which they should have paid if the headline rates where they operate have been taken into consideration.

It is found that overall, the companies have paid a tax of USD 219 billion in income tax over the past decade. That is 3.6% of their total revenue which was more than USD 6 trillion. Income tax is paid on the basis of profits earned by the company, but the researchers have conveyed that the silicon six companies have deliberately shifted their income to low-tax jurisdiction places in order to pay less amount of tax.

Did Amazon Evade Taxes?

The report based on the regulatory filings of the company has found that Amazon has collected a revenue of around USD 1.6 trillion and reported a profit of around USD 60.5 billion and has only paid a tax amount of USD 5.9 billion for the year 2011 to 2020.

According to international tax rates, Amazon is supposed to pay an amount of USD 10.7 billion in taxes. The tax paid by Amazon over the past decade from 2011 to 2020 is the lowest of all the silicon six companies that are 9.8%.

Annual net revenue of Amazon from 2010 to 2020
Annual net revenue of Amazon from 2010 to 2020

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Amazonโ€™s Reply to the claim

A spokesperson of Amazon had commented on the claims conveying that the calculations are extremely misleading. He added that Amazon is primarily a retail company whose profit margins are low and comparing to other tech companies who have an operating profit of more than 50% is completely irrational.

The company has conveyed that the government writes the tax laws and Amazon has always tried to pay all the tax dues and always encourages the company to file the tax dues. They also mentioned that they have invested billions in creating jobs and infrastructure and said that these investments coupled with low margins would naturally result in a lower tax rate.


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Did Facebook Evade Taxes?

Facebook the social media platform that is run by Mark Zuckerberg has just paid USD 16.8 billion in income tax during the years 2011 to 2020. The company has reported a profit of USD 133 billion and a revenue of USD 328 billion. The tax paid as a percentage of profit was just 12.7% which is the second lowest among the silicon six companies after Amazon.

Annual net revenue of facebook from 2010 to 2020
Annual net revenue of Facebook from 2010 to 2020

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Facebook's Reply to the claim

A Facebook spokesperson has mentioned that all companies pay taxes on their profits and not their revenues. He added that the previous year, the company has paid USD 4.23 billion in corporate income taxes globally and added that the company had paid an average tax rate of 20.71 % over the last 10 years. This is considered to be roughly in line with the Organisation for Economic Co-operation and Development (OECD) average.

What is a Tech Tax Deal?

Chancellor Rishi Sunak has conveyed that he would want the President Joe Bidenโ€™s administration to sign up for a tech tax deal and added that the tech companies are not paying the right tax amount at the right places which is not fair and which he wants to fix.

The US government's proposals to reform the global tax systems by imposing a minimum of 15% corporate tax would end the profit sharing to tax havens of the big tech companies. Global agreements on tax would have a really big impact on the tech giants with them having to pay billions of additional taxes across the world.

Conclusion

However, the rest companies of Silicon six which include Alphabet, Apple, Netflix and Microsoft have not responded to the request on the feedback and have declined to comment on the situation.

FAQ

Which companies come under the Silicon Six?

Facebook, Amazon, Apple, Netflix Microsoft, and Google are known as the Silicon Six.

Do Big companies pay tax?

Large multinational companies save billions of dollars by using foreign subsidiaries and tax havens and avoid taxes.

What big companies pay no taxes?

In a report it was found that FedEx and Nike are among those who avoided U.S. tax liability for three straight years and atleast 55 large companies paid no taxes in America.

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