Key facts
- Palantir is accused of shifting profits from its European operations to the United States to minimize its tax bill in Europe.
- A report by the Centre for International Corporate Tax Accountability and Research (CICTAR) found that Palantir's European subsidiaries report significantly lower profit margins than its U.S. business.
- In 2025, Palantir's U.S. operations had a profit margin of 47.7%, compared to 6.3% outside the U.S.
- The report claims Palantir "intentionally and artificially" shrinks European profits, though it does not allege illegal activity.
- High personnel costs and the use of stock-based compensation in European subsidiaries are cited as reasons for lower reported profits.
Palantir is reportedly shifting profits from its European operations to the United States to minimize its tax obligations in Europe, according to a new report by the U.K.-based Centre for International Corporate Tax Accountability and Research (CICTAR).
The report found that while Palantir's European subsidiaries generated €440.5 million in annual revenue in 2024, they reported significantly smaller profit margins compared to the company's U.S. business. In 2025, Palantir's U.S. operations achieved a profit margin of 47.7 cents per dollar of revenue, more than double the previous year's 22.5 cents. Outside the U.S., the profit margin was only 6.3%, falling to around 3% in some European subsidiaries.
CICTAR alleges that Palantir "intentionally and artificially" reduces its reported European profits to concentrate them in the U.S. The report clarifies that such profit-shifting arrangements are not claimed to be illegal, as multinational companies often pay related entities for intellectual property, loans, or expertise to reduce reported profits.
For instance, in Sweden, Palantir reported €13.7 million in revenue in 2024 but only €1.1 million in profit, leading to a tax bill of €424,000 at the country's 20% corporate tax rate.
Palantir's Q2 earnings report focused on its U.S. business, which saw revenue rise 115% year-on-year to $1.57 billion and boasted a 62% profit margin. A spokesperson for Palantir stated that the company's tax position in each jurisdiction reflects its economic activity there and that it meets its tax obligations.
The report also points to high personnel costs in European subsidiaries, particularly in the U.K., where employee costs averaged £230,974 per staff member in 2024. The use of stock-based compensation across European subsidiaries, especially in the U.K., Spain, and Norway, is also cited as a factor that lowers a subsidiary's corporate tax bill by being recorded as staff expenses.
Other U.S. tech companies, including Apple, Amazon, and Microsoft, have previously faced scrutiny over their profit booking and tax practices in Europe.