Palantir Technologies, one of the world’s most influential—and controversial—surveillance tech companies, enjoyed an effective tax rate of just 1.4% globally last year while paying no US federal income tax despite recording substantial profits, an analysis released on Wednesday revealed.

The study,Who Pays for the Surveillance State?, was written by the Center for International Corporate Tax Accountability and Research (CICTAR) in partnership with the European Federation of Public Services Unions. The 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 [in] corporate tax paid globally, and paid $0 in US federal income tax, resulting in an effective tax rate of just 1.4% globally,” CICTAR found.

“The report’s core claim of profit-shifting is based on the gap between revenue and profit location: 26% of Palantir’s revenue came from outside the US, but 96% of pre-tax profit was booked in the US,” the analysis states.

“The Trump administration has not only been granting record amounts in new contracts to Palantir but is running a global protection racket to help it—along with larger US tech giants—avoid paying tax both in the US and globally,” the report contends.

“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,” CICTAR added.

Palantir maintains that it complies with applicable tax laws in every jurisdiction where it operates. Company representatives have said that transfer pricing arrangements and other accounting practices cited by critics are standard among multinational corporations and comply with existing regulations.

The Palo Alto, California-based company’s soaring revenues are partly driven by government contracts, with the US Department of Defense being the data analytics specialist’s biggest client. Palantir is also integral to the Trump administration’s deadly anti-immigrant crackdown, selling technology used by Department of Homeland Security agencies—including Immigration and Customs Enforcement (ICE)—to identify, track, and target people for arrest and deportation and manage their cases.

Palantir has also drawn scrutiny from Democratic US lawmakers, including Sen. Ron Wyden of Oregon and New York Congresswoman Alexandria Ocasio-Cortez, who demanded answers following reporting last year that the company was "amassing troves of data on Americans to create a government-wide, searchable ‘mega-database’ containing the sensitive taxpayer data of American citizens.”

Palestine defenders have also denounced Palantir and other tech giants for selling technology to the Israeli government and military despite findings by rights groups, scholars, national governments, and a United Nations commission of inquiry that Israel is committing genocide in Gaza.

Alex Karp, the billionaire co-founder and CEO of Palantir, told CNBC last month: “I am the most publicly supportive CEO of Israel. I think Israel is on the side of good.”

In Europe, advocacy groups have raised concerns about Palantir’s contracts involving sensitive medical records, immigration systems, and predictive analytics. Campaigners argue that centralized data platforms create attractive targets for misuse, unauthorized access, or mission creep beyond their original purposes.

CICTAR’s 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.”

Responding to the report, Andrea Egan, general secretary of UNISON, the largest trade union in the United Kingdom, said that “a big multinational aggressively avoiding tax and dodging its responsibility to pay a fair share is probably no surprise. But the fact the UK and other countries are rewarding Palantir with massive government contracts is what beggars belief.”

“Systems that enable tax to be shirked on an industrial scale clearly have to change," she added. "The likes of Palantir need to stump up what’s due. Tech giants raking off billions in profit can’t be free to pay what they please. Ministers shouldn’t award contracts to run public services to firms that are starving them of cash.”

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