The group, which campaigns for greater tax transparency, said that seven of the biggest US-headquartered tech companies, including Apple, Microsoft and Google owner Alphabet, were able to avoid corporation and digital sales tax worth almost £2bn by routing their profits elsewhere.
TaxWatch estimated how much UK tax these groups would have paid if their British subsidiaries had declared profits at the same rate as they declared them worldwide.
While none of these companies are breaking the law, TaxWatch estimated that based on revenues of £60.5bn in the 2021 tax year, the companies made an estimated £14.8bn in UK profits. Taxed at 19 per cent that would suggest £2.8bn was owed in tax, rather than the £750m paid.
These are estimates and some of the companies listed have disputed the figures. But whatever the true figures are this simply highlights the lack of transparency when it comes to big tech and what they pay in tax and how they use complex international tax rules to shift profits around the world.
Members of the Organisation for Economic Cooperation and Development are due to implement a 15% minimum tax on corporate profits from next year, with the aim of making profit-shifting less attractive.
It’ll be interesting to see if that works and whether the tax owed and paid by the global tech giants better aligns with the profits they make in different countries.