Palantir Applied sciences, the US information analytics and synthetic intelligence firm which has contracts with the nation’s army and intelligence equipment, has “engineered its company construction” to pay no US federal company earnings tax, in line with a brand new report.
The research by the Centre for Worldwide Company Tax Accountability and Analysis (CICTAR) comes as Palantir studies hovering revenues, pushed partly by authorities contracts, whereas it faces continued criticism for offering expertise to the Israeli military amid the genocide in Gaza.
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What does the report present?
Earlier this week, Palantir reported second-quarter revenue of $1.94bn, up 93 p.c from a 12 months earlier. However regardless of its speedy progress, CICTAR mentioned its world efficient tax fee was simply 1.4 p.c in 2025.
CICTAR’s report additionally identifies what it describes as a sample of earnings arising from contracts in the UK and Europe being shifted to the corporate’s US dad or mum firm, leaving comparatively little taxable revenue within the areas the place the work is carried out.
Within the UK, Palantir recorded a company tax cost of about two million kilos ($2.7m) in 2024, regardless of securing greater than 670 million kilos ($900m) in authorities contracts lately.
CICTAR claims its investigation exhibits that Palantir shifts earnings to the US, the place earlier losses and tax breaks assist it pay little or no federal company earnings tax.
Palantir has additionally benefitted from tax adjustments launched beneath US President Donald Trump, together with the discount of the federal company fee from 35 p.c to 21 p.c in 2017.
The report doesn’t allege that any of the preparations recognized are unlawful. However they’ve raised moral questions on whether or not an organization receiving billions of {dollars} in public contracts worldwide ought to be capable to contribute so little in tax.
A spokesperson for Palantir advised the UK’s Guardian newspaper that it absolutely complies with all tax regimes. “Switch pricing, which allocates an organization’s earnings amongst entities inside the Palantir group of corporations, is a completely normal follow that’s nearly common for big multinational corporations,” the spokesperson mentioned.
Al Jazeera has contacted Palantir for remark about this story, however has not obtained a response.
What’s Palantir?
The corporate was based in 2003 by a gaggle that included chief government Alex Karp and billionaire expertise investor Peter Thiel. Palantir initially obtained backing from In-Q-Tel, a nonprofit enterprise capital fund created in 1999 by the CIA to help high-tech startups creating expertise for US intelligence and nationwide safety.
Palantir’s market worth was round $370bn throughout early buying and selling on the Nasdaq inventory trade on Thursday, making it one of many world’s largest 50 publicly listed corporations.
Palantir has confronted growing controversy over its work with the Trump administration’s immigration authorities, together with offering expertise utilized by the Immigration and Customs Enforcement (ICE) company. Greater than 60 folks have died in ICE custody or been shot and killed throughout federal immigration enforcement operations since Donald Trump returned to workplace
In accordance with the CICTAR report, Palantir expertise permits businesses like ICE and the Division of Homeland Safety “to merge huge datasets, together with monetary, immigration, and well being data, with out sufficient transparency or consent, elevating alarms over privateness violations, algorithmic bias, and the rise of the surveillance state”.
How is Palantir linked to Israel?
Palantir has mentioned it has a “strategic partnership” with Israel. The corporate opened workplaces in Israel in 2015.
The CICTAR report states: “There was a ‘surge’ of funding into Israel in response to elevated demand for Palantir software program following the October 7 assaults, and a significant strategic partnership was signed between Palantir and the Israeli Ministry of Defence in [January] 2024 for information analytics and AI.”
Open Intel, a analysis platform monitoring company involvement in Israel’s warfare on Gaza, has discovered that Palantir has recruited former members of Unit 8200, the Israeli army’s elite cyberintelligence division.
Open Intel has additionally reported that Palantir’s software program can mix intercepted communications, satellite tv for pc imagery and different intelligence to assist Israeli forces produce army focusing on lists.
CEO Karp has defended the corporate’s help for Israel. “I’m probably the most publicly supportive CEO of Israel,” he advised CNBC earlier this 12 months, including: “I believe Israel is on the facet of fine.”
Palantir has additionally confronted scrutiny over its imaginative and prescient for the way forward for synthetic intelligence.
In The Technological Republic, a ebook co-written by Karp and Palantir government Nicholas W Zamiska, the pair argue that Silicon Valley has deserted its duty to develop expertise that strengthens Western army energy alongside superior AI capabilities.
Some critics have described the philosophy as a type of “techno-fascism”.
How a lot tax does Palantir pay within the US?
Palantir paid no US federal company earnings tax in 2025 and simply $2.5m in state earnings taxes, in line with the CICTAR report. It was the third consecutive 12 months through which the corporate paid no federal company earnings tax within the US.
CICTAR says Palantir has constructed up greater than $3.5bn in deferred tax property by way of earlier losses, analysis and improvement credit and deductions linked to shares awarded to workers. In easy phrases, these tax advantages can be utilized to cancel out tax due on future earnings.
The report estimates these might shelter Palantir’s subsequent $16.5bn in earnings, permitting it to keep away from federal company earnings tax for a few years.
Palantir has additionally benefitted from the 2017 company fee adjustments launched beneath Trump.
“The present 21% US federal company earnings tax fee (diminished from 35% in 2017 in the course of the first Trump administration) ought to have seen Palantir incurring a $348 million US federal earnings tax expense in 2025. Nevertheless, it paid zero in US federal earnings tax and solely $2.5 million in US state earnings taxes,” the report states.
How a lot tax does Palantir pay elsewhere?
Palantir paid lower than $21.7m in earnings taxes globally in 2025, internet of refunds, regardless of recording pretax earnings of $1.66bn.
Its world tax expense was solely $22.7m, which means that each the tax it recorded in its accounts and the money tax it truly paid amounted to little greater than 1 p.c of its pretax revenue.
Exterior the US, its largest disclosed money tax funds had been $5.8m in South Korea and $4.8m in Japan. It paid $2.8m in France, $1.7m in Germany and a mixed $4.1m throughout all its different international markets.
The UK, Palantir’s largest market exterior the US, was not listed among the many international locations the place it made its largest tax funds, regardless of producing $427m in income there in 2025.
In its UK accounts for 2024, Palantir recorded a company tax cost of about 2 million kilos ($2.7m).
How does Palantir scale back its tax invoice in Europe?
CICTAR says its investigations present that Palantir reduces its European taxes by leaving comparatively little taxable revenue within the international locations the place its workers function and its contracts are delivered.
In 2025, 26 p.c of Palantir’s income was generated exterior the US, however solely 4 p.c of its pretax revenue was recorded abroad. In contrast, 96 p.c of its earnings had been booked within the US, the place its collected tax advantages meant it paid no federal company earnings tax.
In a number of European international locations, native Palantir subsidiaries function largely as service suppliers to the US dad or mum. This leaves them with slender reported revenue margins and correspondingly small tax payments.
Why do Palantir’s authorities contracts matter?
The CICTAR report states that Palantir’s tax preparations are significantly important as a result of a lot of its speedy progress has been pushed by public contracts.
Within the US, the corporate holds multibillion-dollar contracts with authorities businesses, together with the army, intelligence providers and immigration authorities. Greater than half of Palantir’s income now comes from authorities prospects, in line with the report.
Within the UK, Palantir holds a minimum of 670 million kilos ($901m) in authorities contracts, together with a 330 million-pound ($444m) settlement to construct the Nationwide Well being Service (NHS) Federated Knowledge Platform and a 240 million-pound ($323m) Ministry of Defence contract awarded and not using a aggressive tender.
The NHS contract has attracted criticism from well being employees and digital rights teams, who’ve questioned the choice to entrust delicate affected person information to an organization that has confronted scrutiny over allegations that its expertise has been used to help Israel’s genocide in Gaza.
Though tax avoidance methods might be authorized and the report doesn’t allege that Palantir has damaged the regulation, CICTAR says Palantir “seems to do all the pieces it might to keep away from company earnings tax funds – the spine of nationwide financial safety – which pay for the providers it seeks to ship, and lots of different important public providers”.
Duncan McCann, tech and information lead on the Good Legislation Mission within the UK, advised Al Jazeera the findings had been “a slap within the face to odd taxpayers and native companies who play by the foundations”.
“It’s utterly unacceptable that multinational tech giants like Palantir are blissful to extract large earnings from the UK market whereas allegedly exploiting accounting loopholes to dodge their company obligations,” he mentioned.
In the meantime, the UK Treasury’s personal procurement steerage states that public our bodies mustn’t “have interaction in, or connive at, tax evasion, tax avoidance or tax planning” and must be vigilant to not facilitate tax preparations which might be “detrimental or disadvantageous to the Exchequer”.
Amnesty Worldwide has referred to as on the UK authorities to rethink Palantir’s authorities contracts. Each the UK authorities and NHS England ought to “stop the acquisition of apparatus and providers from the corporate” till it might show it’s “not contributing to Israel’s genocide, apartheid, illegal occupation or different crimes beneath worldwide regulation”, Amnesty mentioned.
