Thats according to TaxWatch, a think tank formed to expose abuses of the taxation system.
TaxWatch estimates these companies made almost 15bn (17.3bn) of profit from British customers in 2021 alone.
However, international tax rules allow these firms to shift most of these profits to other countries.
As a result, theywere only liable for annual UK taxes of around 753mn (869mn).
If the profits hadnotbeen moved elsewhere, that figure could have quadrupled.
TaxWatch estimates that the tax due would have been around 2.8bn (3.2bn).
The research, however, doesnt claim that the tech firms have used any illegal practices.
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Under current tax rules,multinational corporations can lawfully operate worldwide while concentrating their profits in low-taxed jurisdictions.
Consequently, they can dramatically shrink their tax burden in some of their biggest markets.
Claire Ralph, the director of Taxwatch, told TNW that the shortfall stems from outdated laws.
Big techs tax tactics
These issues are widespread, but theyre particularly acute at tech companies.
One reason for this is the sectors uniquely cross-border operations.
Tech giants can thereby get a global reach from headquarters in low-tax countries.
Another factor is thepropensity for services to be provided by one tech group company and traded within the group.
Transactions are rarely kept at arms-length which makes it harder to calculate a normal allocation.
The market dominance of some global giants is distortionary, Ralph said.
In addition, big tech has enormous profits.
Three of the five most profitable companies in the world are tech companies, according toForbes.
(Oil giant Saudi Aramco is number one, followed by Apple and Microsoft.
The fourth spot goes to another oil behemoth, Exxon Mobil.
Alphabet rounds off the top five.)
One effort is a global plan from theOrganisation for Economic Cooperation and Development (OECD).
The initiative aims to let countries capture more tax revenue domestically but progress has been slow.
There are now growingconcerns that countries will ditch the international agreement for local laws.
To theireof the Biden administration, Canada is currently developing its own digital services tax.
The White House has threatened to impose retaliatory measures.
The UK, meanwhile,introduced a domestic digital sales tax in 2020.
The measure applies an extra levy to tech giants, but criticsexpectcompanies will circumvent the rules.
TaxWatch has raised doubts about both the global and national schemes.
Reform of the international tax regime is overdue, Ralph said.
In addition to reform, Taxwatch has called for greater transparency.
The think tankwants the Britishgovernment to require greater public disclosure of profits for tax purposes.
This would make it easier to discern the tax contributions from large companies.
Story byThomas Macaulay
Thomas is the managing editor of TNW.
He leads our coverage of European tech and oversees our talented team of writers.
Away from work, he e(show all)Thomas is the managing editor of TNW.
He leads our coverage of European tech and oversees our talented team of writers.
Away from work, he enjoys playing chess (badly) and the guitar (even worse).
