Palantir funnels earnings to US to avoid European taxes, report finds
A report by the Centre for International Corporate Tax Accountability and Research found that Palantir's European subsidiaries report far smaller profit margins in Europe than in the U.S., allowing the company to pay minimal taxes in Europe.
Intelligence analysis by Llama
Palantir is shifting profits from its European operations to the United States, allowing the company to pay minimal taxes in Europe. The report found that Palantir's European subsidiaries report far smaller profit margins in Europe than in the U.S.
Palantir is a big company that helps other companies with data. It makes a lot of money in Europe, but it doesn't pay much tax there. Instead, it sends its profits to the United States, where it doesn't have to pay as much tax. This is like a big game of tax avoidance, where companies try to pay as little tax as possible. It's not fair to the countries where the company makes its money, because they need the tax money to fund public services like schools and hospitals.
Analysis
A $60B Vote of Confidence
Palantir, a data analytics giant, has been found to be shifting profits from its European operations to the United States, allowing the company to pay minimal taxes in Europe. A report by the Centre for International Corporate Tax Accountability and Research found that Palantir's European subsidiaries report far smaller profit margins in Europe than in the U.S. This is not the first time a U.S. tech company has drawn scrutiny over how it books profits in Europe. In 2024, the European Court of Justice ordered Apple to pay Ireland €13 bn in back taxes, ending an 8-year-long fight over what Brussels said amounted to illegal state aid. Amazon also fought the European Commission over claims it had received an unlawful tax advantage worth around €250 million in Luxembourg — a case the company ultimately won. Microsoft, meanwhile, has faced scrutiny over its Irish subsidiary, Microsoft Round Island One, which avoided paying millions to the state after claiming tax residency in Bermuda. The U.S. software giant has denied that it is circumventing Ireland's tax laws. Jan Willem Goudriaan, General Secretary of the European Federation of Public Service Unions — a supporter of CICTAR— said that companies such as Palantir, Amazon and Microsoft focus on minimizing the taxes they pay, 'thus robbing funding for public services.' 'Companies bidding for public contracts should have to demonstrate responsible tax conduct by disclosing where their revenues, workforce, profits and taxes are located,' he said. Another reason for the low profits of Palantir's European subsidiaries is their high personnel costs. In the U.K., where most of the company's non-U.S. workforce is based, Palantir reported £173 million (€204.3 million) in employee costs for 749 staff in 2024 — an average of £230,974 (€272,803) per employee. The report also points to Palantir's use of stock-based compensation across its European subsidiaries, especially in the U.K., Spain and Norway. This means employees are paid partly in company shares or awards. Those awards are recorded as staff expenses, which can lower a subsidiary's corporate tax bill. Palantir's tax position in each jurisdiction reflects the level of economic activity there, and the company meets its tax obligations in every market in which it operates, a U.K.-based Palantir spokesperson said. The majority of the company's 2025 revenue and profitability was driven by its U.S. business, the spokesperson added.
Key points
- Palantir is shifting profits from its European operations to the United States to avoid paying taxes in Europe.
- The company's European subsidiaries report far smaller profit margins in Europe than in the U.S.
- Palantir's tax position in each jurisdiction reflects the level of economic activity there, and the company meets its tax obligations in every market in which it operates.
- The company's use of stock-based compensation across its European subsidiaries can lower a subsidiary's corporate tax bill.
- Palantir's high personnel costs in the U.K. and other European countries contribute to its low profits in those regions.
If Palantir is forced to pay more taxes in Europe, it could lead to increased funding for public services and infrastructure projects. This could have a positive impact on the economy and society as a whole.
If Palantir continues to avoid paying taxes in Europe, it could lead to a loss of revenue for governments and a decrease in funding for public services. This could have a negative impact on the economy and society as a whole.
