About the Fair Tax Foundation

The Fair Tax Foundation, established in 2014, is a not-for-profit social enterprise promoting responsible tax practices. It developed the Fair Tax Mark, the world’s first certification for responsible tax conduct, now held by 270 companies across Europe. The Foundation also runs initiatives such as the Tax Responsibility and Transparency Index and Fair Tax Week. It argues that tax avoidance erodes public services, weakens fair competition, and reduces productivity, while responsible tax behaviour supports equitable and transparent business practices.

Background

The report analyses the tax conduct of six leading technology firms—Alphabet (Google), Amazon, Apple, Meta (Facebook), Microsoft, and Netflix—over 2015–2024. Collectively worth USD 12.9 trillion and generating USD 1.8 trillion in annual revenue, these firms hold significant economic and political influence, including USD 115 million in lobbying expenditure across the US and EU in 2024.

The analysis is based on US 10-K filings, which provide limited detail on corporate income tax paid, requiring inferences from available data. The Foundation highlights the lack of transparency among these firms, noting their reluctance to publish country-by-country tax breakdowns. The report emphasises that the limited disclosure makes it difficult to determine whether these corporations pay fair taxes globally.

The Silicon Six and their $250bn global tax gap

Between 2015 and 2024, the Silicon Six earned USD 11 trillion in revenue and USD 2.5 trillion in profits but paid an average corporate income tax rate of 18.8%, significantly below the global average of 27%. Excluding one-off repatriation payments linked to historical avoidance, the effective rate falls to 16.1%.

The gap between headline rates and cash taxes paid totals USD 277.8 billion, while the difference between reported current tax provisions and actual cash taxes totals USD 82.1 billion. This persistent variance suggests a mismatch between financial reporting to investors and reporting to tax authorities.

Profits booked overseas and taxes paid, far lower than revenue raised

Despite earning 49% of revenue overseas, only 36% of profits were booked outside the US, and just 30% of tax provisions were foreign. Overseas income is typically taxed at lower rates due to profit shifting and lower booked margins.

For example, Microsoft’s UK subsidiary reported a 3.6% margin in 2022 compared to a 42.2% global margin, attributed to transfer pricing practices. The report calls for governments to address these imbalances through stronger tax measures, similar to those applied in energy and banking sectors.

Aggressive tax practices continue to rise

Uncertain tax positions of the six firms tripled from USD 24.8 billion in 2015 to USD 82.5 billion in 2024. These positions represent tax benefits likely to be overturned under audit. The Foundation notes that such aggressive practices inflate reported tax charges and obscure actual tax contributions.

Money for old rope – The FDII tax break

The Foreign-Derived Intangible Income (FDII) deduction allows US firms to pay just 13% tax on overseas profits linked to intellectual property held in the US. Between 2022 and 2024, the Silicon Six saved USD 30 billion through this provision, reducing effective tax rates by up to five percentage points for Meta, Alphabet, and Netflix. The report recommends abolishing the FDII as an ineffective and inequitable subsidy.

Silicon Six tax gap shows need for a Global Minimum Tax

The Foundation supports the OECD’s 15% Global Minimum Tax (GMT), noting that recent effective tax rates for the Silicon Six range from 11.8% (Meta) to 18.5% (Apple). The GMT, already adopted by 67 jurisdictions, could reduce global profit shifting by half and raise corporate tax revenues by up to USD 192 billion annually.

Silicon Six: Ranking

The 2025 ranking, consistent with earlier reports, places Amazon as the worst performer, followed by Meta, Alphabet, Netflix, Apple, and Microsoft. Amazon paid USD 38.6 billion in income tax over the decade, despite revenue double that of Microsoft, which paid USD 113 billion.

Pressing need for improved financial transparency

The Foundation advocates for public country-by-country reporting (pCbCR) to reveal where profits are made and taxes paid. Evidence from sectors already adopting pCbCR shows reduced tax haven use and higher effective tax rates. New EU and Australian regulations will require pCbCR by 2026. The UK is urged to implement similar mandates to align with peers and improve global tax transparency.

Looking forward

The report calls for the US to abolish the FDII tax break and adopt the OECD’s 15% GMT. Other countries should reassess the low taxation of overseas revenue from the Silicon Six and introduce policies ensuring fairer tax contributions and equitable competition. The UK is encouraged to mandate public country-by-country reporting to strengthen transparency and accountability in multinational taxation.