The largest companies in Silicon Valley are suspected of tax evasion

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The largest companies in Silicon Valley are suspected of tax evasion

Silicon Valley’s top six companies have a combined tax gap of more than $ 100 billion in this decade, according to research..

Fair Tax Mark, a UK-based organization that certifies businesses for good tax behavior, assessed global tax payments from Facebook, Apple, Amazon, Netflix, Google and Microsoft between 2010 and 2019.. These companies are sometimes collectively referred to as «Silicon six».

A study published Monday analyzed filings that are financial forms submitted by businesses to the US government.

The company studied tax reserves — amounts that firms set aside in their financial statements to pay taxes, — and compared them to the amounts that were actually transferred to the government, called taxes on cash. Over the decade, the difference between the reserves of the Silicon Six and the taxes actually paid by them totaled $ 100.2 billion.

The report notes that controls over tax payments of large corporations often focus solely on tax provisions, which are not always the final amount received by governments.. 

The researchers said the bulk of the deficit «almost certainly originated outside the United States», and foreign tax revenues accounted for only 8.4% of the profits earned by companies abroad over a decade.

Fair Tax Mark CEO Paul Monaghan said there was a huge difference between what companies accounted for and what actually passed through taxes..

«The amount of tax paid by these businesses is 100 billion less than what their reports suggest», – he said.

Amazon was named the top perpetrator of six firms. The report claims the e-commerce giant has paid just $ 3.4 billion in income taxes since 2010.. 

The largest companies in Silicon Valley are suspected of tax evasion

«The company is building up its market dominance across the globe with profits that are largely tax-free and could unfairly undermine local businesses that take a more responsible approach.», – says the report.

Amazon completed 2018 year with 232.9 billion in annual income, and today has a market capitalization of about 892 billion.

Amazon spokesman responded that the assumptions made in the Fair Tax Mark report were wrong.

«Amazon represents about 1% of global retail, with larger competitors everywhere we operate, and has a 24% effective income tax rate since 2010-2018», – noted in the company.

The spokesman also added that Amazon has invested 55 billion euros across Europe since 2010 and 18 billion pounds in the UK, and paid 793 million pounds in taxes in the UK alone last year..