Are tech giants paying their fair share of tax?

As the world's tech giants continue to achieve impressive revenues globally, many experts question whether it's time to impose more appropriate taxes on them and how this can be achieved.

The world's largest tech companies are increasingly coming under pressure over their tax affairs. In 2019, a report claimed that Amazon, Google, Facebook, Apple, Microsoft and Netflix have "aggressively" avoided a worldwide tax bill of $100 billion in the last 10 years.

From the UK to France, many countries are beginning to take steps to clamp down on this issue by introducing digital services taxes. But with European lawmakers recently reversing a decision to thrust a €13bn Irish tax bill onto Apple, are these efforts destined for failure and will tech giants ever pay their fair share of tax?

Thomas Husson, an analyst at Forrester, believes that American tech giants will eventually be faced with larger tax bills despite Apple's successful appeal in Europe. He says: "If Apple clearly won the battle, the EU commission and some European governments have not lost the war yet. It will take a lot of time to adapt regulation and fiscal rules to the new digital order, but eventually, I think US tech giants will end up paying more local taxes."

His view is that large tech firms risk angering consumers by paying small tax bills despite making huge profits. "Let's not also forget consumer sentiment and perception. They are increasingly aware of these issues in the various European countries and it is also increasingly damaging for the brand equity of these digital platforms." he says.


Tackling tax avoidance

While Apple may have been successful in getting the Irish tax bill thrown out of court, Husson expects the European commission to launch its own appeal. He tells IDG Connect: "The EU's General Court (the EU second-highest court) said it had annulled the EU commission decision because there was not enough evidence to show Apple broke EU competition rules.

To continue reading this article register now