For comments on a report that claims Big Tech companies used legal loopholes to avoid more than $100 billion in taxes, Fortune turned to TCU Neeley accounting expert Stephen Lusch.
December 18, 2019
When Fortune needed a tax expert to comment on a report about tax gaps for Amazon, Apple, Facebook, Google, Microsoft and Netflix, they turned to the TCU Neeley School of Business
Stephen Lusch, assistant professor of accounting at the TCU Neeley, provided insights into a report that said the Silicon Six used legal tax strategies to pay $155.3 billion less, collectively by the companies across all global territories in which they operate, than what the actual taxes would have required.
The report used cash taxes paid from cash flow statements and cash provisions from income statements and matched those against the companies’ profits between 2010 and 2019.
Google and Amazon debunked the report.
Fortune writer Erik Sherman said that tax discussions often come down to intricacies in accounting and a complex interplay of numbers; for example, the difference between the provision for income taxes, which aren’t a final statement of taxes, and the actual cash payments.
“Overall, cash effective tax rates, on average, are lower than GAAP [standard U.S. accounting] effective tax rates,” Lusch is quoted as saying in the article. “It’s not surprising that someone looking to highlight low tax rates for tech multinationals will focus on the cash rate, while the company, seeking to combat the perception of ‘not paying its fair share,’ will focus on the GAAP rate in its rebuttal. As usual, the truth ultimately probably lies somewhere in the middle.”
Read the entire article on the Fortune website here.