Palantir is shifting profits from its European operations to the United States, allowing the Florida-based data analytics giant to pay minimal taxes in Europe, a new report finds.

The report by the U.K.-based Centre for International Corporate Tax Accountability and Research, a group partly funded by labor unions that researches corporate tax avoidance in an effort to win reform of global tax rules, found that Palantir’s European subsidiaries, which took in €440.5 million in annual revenue in 2024, report far smaller profit margins in Europe than in the U.S.

“Although a substantial part of Palantir’s revenue is realized in Europe, almost all of the pre-tax profits are funneled to the United States,” the report said.

Palantir pays no U.S. federal income tax because previous losses, tax credits, and R&D deductions offset its taxable income; and virtually no state income tax, with the exception of Maryland, which levies a digital services tax.

The profit gap between the U.S. and Europe is stark. In 2025, Palantir’s American business pocketed 47.7 cents in profit from every dollar of revenue — more than double the previous year’s 22.5 cents. Outside the U.S., the profit margin was just 6.3 percent. In some European subsidiaries, it fell to around 3 percent, according to the new report.

CICTAR argues that Palantir “intentionally and artificially” shrinks European profits — and therefore its European tax bills — to concentrate profits in the U.S. There is no claim in the report that such arrangements, often referred to as “profit shifting,” are illegal. Multinational companies often reduce reported profits by paying subsidiaries or other related entities for intellectual property, loans or expertise.

In Sweden, for example, Palantir reported €13.7 million in revenue in 2024, but only €1.1 million in profit. At Sweden’s 20 percent corporate tax rate, that left the company with a tax bill of just €424,000.

In its Q2 earnings report on Monday, Palantir made no explicit reference to earnings from its European subsidiaries. Instead, it highlighted its U.S. business, where revenue rose 115 percent year-on-year to $1.57 billion (€1.36 billion), and boasted of its 62 percent profit margin.

A U.K.-based Palantir spokesperson said that the majority of the company’s 2025 revenue and profitability was driven by its U.S. business. “Our tax position in each jurisdiction reflects the level of economic activity there, and we meet our tax obligations in every market in which we operate,” the spokesperson said.

Not alone

Palantir is not the first U.S. tech company to draw scrutiny over how it books profits in Europe.

In 2024, the European Court of Justice ordered Apple to pay Ireland €13 bn in back taxes, ending an 8-year-long fight over what Brussels said amounted to illegal state aid. Amazon also fought the European Commission over claims it had received an unlawful tax advantage worth around €250 million in Luxembourg — a case the company ultimately won. Microsoft, meanwhile, has faced scrutiny over its Irish subsidiary, Microsoft Round Island One, which avoided paying millions to the state after claiming tax residency in Bermuda. The U.S. software giant has denied that it is circumventing Ireland’s tax laws.

Jan Willem Goudriaan, General Secretary of the European Federation of Public Service Unions — a supporter of CICTAR— said that companies such as Palantir, Amazon and Microsoft focus on minimizing the taxes they pay, “thus robbing funding for public services.”

“Companies bidding for public contracts should have to demonstrate responsible tax conduct by disclosing where their revenues, workforce, profits and taxes are located,” he said.

Another reason for the low profits of Palantir’s European subsidiaries is their high personnel costs. In the U.K., where most of the company’s non-U.S. workforce is based, Palantir reported £173 million (€204.3 million) in employee costs for 749 staff in 2024 — an average of £230,974 (€272,803) per employee.

The report also points to Palantir’s use of stock-based compensation across its European subsidiaries, especially in the U.K., Spain and Norway. This means employees are paid partly in company shares or awards. Those awards are recorded as staff expenses, which can lower a subsidiary’s corporate tax bill.

For Europe’s maritime sector—and beyond—the European Commission’s proposal to revise the EU Emissions Trading System (ETS) goes in the right direction and reflects much of what Cruise Lines International Association (CLIA) has consistently called for: a framework in which carbon pricing supports, rather than holds back, the maritime transition, strengthens Europe’s industrial competitiveness and preserves connectivity, including for outermost regions. The starting point is an encouraging one.

The proposal matters because it is about far more than carbon pricing. Not that the sector shies away from that: cruise lines already comply with the ETS, in addition to port dues, passenger charges, tonnage-based taxes and value-added tax (VAT). Unlike traditional taxation, the ETS is designed to drive decarbonization. Its revision matters because, by reinvesting a greater share of maritime ETS revenues in infrastructure—ports, shore-side electricity, alternative fuels, bunkering and other facilities—Europe can help the maritime industry maintain its global leadership while accelerating the energy transition. That leadership is not a matter of prestige. It is a matter of European prosperity, jobs, skills, competitiveness and industrial capacity across the continent.

The cruise industry alone generates an annual economic impact of €64.1 billion in Europe and supports 445,000 jobs. It is also one of Europe’s industrial success stories, combining world-leading shipbuilding, advanced engineering and maritime innovation with high-value tourism. Behind those figures lies a shipbuilding story that few industries can match: 98 percent of the global cruise orderbook is built in European shipyards, from Fincantieri in Italy to Chantiers de l’Atlantique in France and the Meyer yards in Germany and Finland. There is €62.2 billion committed to ships on order through 2037. This investment sustains a vast ecosystem of engineering firms, technology providers and thousands of suppliers, keeping in Europe the skills and industrial capacity that other regions of the world are actively trying to attract.

By reinvesting a greater share of maritime ETS revenues in infrastructure—ports, shore-side electricity, alternative fuels, bunkering and other facilities—Europe can help the maritime industry maintain its global leadership while accelerating the energy transition.

That is why it is important to be clear about cruise’s role in Europe. Cruise is a key part of the maritime industry: we build ships, move people between ports and across seas, and help drive innovation and investment through one of the most advanced supply chains in Europe. Cruise should therefore be understood first and foremost as part of Europe’s maritime industrial ecosystem, combining maritime transport, advanced manufacturing and tourism in a way few sectors do. It is governed by an extensive regulatory framework alongside the rest of international shipping while supporting one of Europe’s most innovative maritime value chains.

Cruise represents just a small fraction of the global fleet—less than one percent of commercial vessels—but it is consistently at the forefront of maritime’s transformation in ways that benefit the broader maritime sector. Decarbonization is our north star, and our experience shows that it advances fastest when it travels hand in hand with innovation. Done well, decarbonization is not only an environmental objective but also a driver of industrial modernization and European competitiveness. This is why cruise matters to Europe’s maritime future: the industry is helping to turn decarbonization ambition into industrial progress—investing more than €44 billion since 2022 in new ships designed to meet or exceed Europe’s environmental regulations to improve performance and advance the maritime transition.

The cruise industry alone generates an annual economic impact of €64.1 billion in Europe and supports 445,000 jobs. It is also one of Europe’s industrial success stories, combining world-leading shipbuilding, advanced engineering and maritime innovation with high-value tourism.

More than half of the capacity on order today is capable of using liquefied natural gas (LNG), which can reduce CO2 emissions by up to 20 percent compared with conventional fuels. And while LNG is not the end-game solution, it does serve as an important bridge to lower-emissions fuels like renewable and synthetic methane as these types of fuels become available at scale. Today, 57 percent of cruise ships on order are designed with multi-fuel capability, meaning their engines will be able to run on low and zero greenhouse gas fuels, when available at scale. In addition, more than 60 percent of the global cruise fleet can already connect to shore-side electricity where ports are equipped, allowing ships to switch engines off at berth and reduce emissions by up to 98 percent. By 2028, close to 75 percent of capacity will be shore-power-ready.

The environmental transition is broader than carbon reduction alone. Across the global fleet, 225 ships—80 percent of the fleet and 84 percent of passenger capacity—are outfitted with advanced wastewater treatment systems, with more than a third capable of meeting stricter Baltic Sea Special Area discharge standards. More than 94 percent of the reporting fleet produces freshwater onboard, and approximately 60 percent can meet their full onboard consumption needs. Together, the cruise sector’s advancements in environmental technologies and practices help reduce emissions, support responsible operations and lessen pressure on local infrastructure in the destinations cruise ships visit.

Europe leads the world in cruise shipbuilding, maritime innovation and the deployment of technologies that can help decarbonize shipping.

None of this happens in isolation from the places we serve. Cruise itineraries are planned up to three years in advance, which makes cruise one of the most predictable forms of tourism and allows ports, destinations and operators to manage visitor flows together. The economic footprint is tangible and local: when a ship provisions in port, a single day’s order of fresh produce alone can be worth some €150,000 to local suppliers, before counting fuel, services, excursions and the wider activity a call generates. And because cruise ships connect islands, outermost regions and remote coastal communities—often where alternative transport links are limited—cruise can extend the tourism season and spread benefits well beyond the traditional hotspots.

The road ahead, through the European Parliament, Council and trilogues, will be long, and we will walk it constructively together with our members and institutions at every stage. But the compass is set. Europe leads the world in cruise shipbuilding, maritime innovation and the deployment of technologies that can help decarbonize shipping. By preserving that leadership and reinvesting the sector’s ETS contribution into maritime infrastructure, fuels and facilities, the ETS will not merely price emissions—it will help build the ports, fuels and ships of the future, preserving the competitiveness and global leadership of Europe’s maritime industry for decades to come.

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Disclaimer

POLITICAL ADVERTISEMENT

• The sponsor is Cruise Lines International Association (CLIA)
• The political advertisement is linked to advocacy on The EU Emissions Trading System (ETS).

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