Who Pays for the Surveillance State?
Palantir Technologies Inc, the controversial US AI and data firm, has snapped up public contracts worldwide, especially in Europe. Written in partnership with the European Federation of Public Services Unions (EPSU) and a number of national unions from across Europe, this report examines how Palantir is capturing ever larger government contracts while paying no US federal corporate income tax and shifting much of its foreign profits back to the US, avoiding taxes in Europe.
In 2025 the company reported $1.657 billion in pre-tax profit, booked $22.7 million corporate tax paid globally, and paid $0 in US federal income tax, resulting in an effective tax rate of just 1.4 percent globally.
The report's core claim of profit-shifting is based on the gap between revenue and profit location: 26 percent of Palantir's revenue came from outside the US, but 96 percent of pre-tax profit was booked in the US. In Europe, the report finds a pattern of subsidiaries providing services to the US parent on cost-plus terms, leaving low taxable margins locally while related-party payments move value back to the US.
The UK is Palantir’s biggest market outside the US accounting for 10% of its revenue in 2025. Yet it pays less tax in the country than in Korea, Japan, France or Germany, all of which are much smaller markets. Accumulated losses, R&D tax credits and stock-based employee compensation schemes appear to be key to Palantir’s approach to reducing corporate tax payments.
The report concludes that European public authorities should be able to exclude companies that take public money while shifting profits away from the national tax base that funds public services, and provide the basis for national security that Palantir claims to defend.