Palantir pays 1.4 percent tax amid profit-shifting practices, report reveals

Palantir Technologies, a major player in data analytics and artificial intelligence, has reportedly engineered its corporate structure to minimize its U.S. federal tax obligations, paying just 1.4 percent in corporate taxes, according to a new study by the Centre for International Corporate Tax Accountability and Research (CICTAR). This revelation comes as the company, which has significant contracts with the U.S. military and intelligence agencies, also faces scrutiny over its role in providing technology to the Israeli military amid the ongoing conflict in Gaza.

The timing of the report is notable, as Palantir recently announced a staggering 93 percent increase in second-quarter revenue, reaching $1.94 billion. Despite this rapid growth, CICTAR's findings indicate that the company has been shifting profits from contracts in the U.K. and Europe to its U.S. parent company, resulting in minimal taxable income where the actual work is performed. For instance, while Palantir secured approximately $900 million in government contracts in the U.K., it recorded a mere $2.7 million in corporate tax charges for 2024.

CICTAR's investigation highlights how Palantir's profit-shifting practices are facilitated by prior losses and tax breaks in the U.S., including the reduction of the federal corporate tax rate from 35 percent to 21 percent enacted during the Trump administration. While the report does not suggest any illegal activity, it raises ethical concerns about a company that receives billions in public contracts contributing so little to the tax system. A Palantir spokesperson defended the company's practices, asserting that they comply with all tax regulations and that profit allocation is a standard practice among large multinationals.

Founded in 2003 by a group that includes CEO Alex Karp and investor Peter Thiel, Palantir has become one of the world's largest publicly listed companies, with a market value of around $370 billion. The company has faced ongoing controversy, particularly over its involvement with U.S. immigration authorities and its technology used by the Immigration and Customs Enforcement agency. As discussions about corporate tax responsibilities intensify, Palantir's practices may prompt further scrutiny from lawmakers and the public alike.