Written as editor of the New Statesman’s NS Tech and first published here.

Earlier this week, for the first time in history, the world’s top five companies by stock market value were all US global technology firms. Apple, Alphabet (Google), Microsoft, Amazon and Facebook, to be more precise.

Hailing our ‘new tech overlords’, Bloomberg even created a handy graphic to show what a profound change this represents in what is starting to look a truly borderless digital world.

Unfortunately, the names of our new rulers have also become pretty synonymous with dubious tax arrangements in recent years.

That’s a fact that has not escaped MPs reporting this week on the future of the global tax system on our web-powered planet.

The Responsible Tax report takes a deep dive into the efforts currently being made by the Organisation for Economic Co-operation and Development (OECD) on country-by-country tax reporting.

And the ‘digital economy’ is the only industry that’s singled out as a key challenge to creating a responsible global tax regime.

And it’s no wonder:

Apple

• In December 2015, the US Government claimed that Apple uses a “sophisticated scheme” to avoid paying tax on $74 billion (£496.5 billion) of revenues held overseas.
• Tim Cook, Apple CEO, dismissed the claim as “total political crap”.
• Apple was found to be using Irish tax laws that allow companies to be incorporated in the country without being tax resident.

Google

• In January 2016 Google struck a deal to pay £130 million in back taxes after an “open audit” of its accounts by the UK tax authorities.
• The payment covers money owed since 2005 and followed a six year inquiry into the company by HMRC.
• A spokesperson at Google said: “Governments make tax law, the tax authorities enforce the law and Google complies with the law.”

Microsoft

• In June 2016 it was reported that Microsoft avoided up to £100 million a year in UK corporation tax by routing its sales through Ireland.
• The corporation has sent more than £8 billion of revenues from computers and software bought by British customers to Ireland since 2011, as part of a deal with HMRC.

Amazon

• In June last year, it was revealed that the Amazon’s UK branch paid £11.9 million in tax on £5.3 billion worth of sales.

Facebook

• In 2014, Facebook paid just £4,327 in corporation tax in the UK.
• Facebook said it made a loss of £28.5 million in Britain in 2014, after paying out more than £35 million to its 362 staff in a share bonus scheme.

Indeed, Amazon and Google even get special mentions in the MPs’ report, for unfair competition with local booksellers and the UK’s bodged ‘Google Tax’, respectively.

“The globalisation of business and changes created by digitalisation make it difficult to determine where value is created and which country should obtain the tax revenue,” the report says.

It states that a tax system designed almost 100 years ago cannot take into account the diffuse nature of sales being made by multinationals to customers living all over the world.

Although the report praises the OECD’s progress on building “international consensus” on creating new global tax rules, it says the current strategy “will fall short of creating the fair and transparent global system that is needed to tackle global tax avoidance”.

Despite the fact that 94 countries are now working together on specific areas of the OECD’s plan, tax havens like the British Virgin Islands and even the United States, are failing to get involved.

“The US is fiercely protective of their global companies and their corporate tax revenue. There are fears that in the wake of the BEPS Action Plan multinational companies will be tempted to move their businesses away from the US with their high corporation tax rate to Europe with its low corporate tax rates…

“Or that aggressive EU countries will lay claim to tax revenues that should belong to the US. The evidence, however, indicates that the US itself is by far the biggest loser of revenues due to the avoidance of US multinationals.”

As well as huge criticism of the UK government for saying one thing and doing another, there is also:

• a lack of agreement on making the tax data publicly available;
• an issue around how the complexity of the new rules will disadvantage poorer countries, which depend more on corporation tax;
• a lack of legally binding rules;
• a high bar to qualify for OECD tax reporting (£586 million in group revenue), meaning many multinationals will be exempt.

So, what to do?

As well as making recommendations to beef up the OECD’s current plan, which it calls a “sticking plaster”, the report makes a rather radical proposal based on the evidence it received:

“There was broad support for a unitary based tax system with formula apportionment overseen by a global body such as the OECD or the United Nations whereby each company would submit one report of consolidated accounts for the global group.

“The report would specify the group’s assets, the size of the workforce and sales. The overall profits would be then divided up among jurisdictions according to an agreed formula based on these factors. This would reflect the reality that subsidiaries of companies are not separate entities that trade with one another, but are actually all parts of one global company.”

It believes that country-by-country reporting is just part of a longer process towards “radical reform” that should ultimately see multinationals, powered by the internet, paying tax.

The OECD estimates that up to 10 per cent of global revenues from corporation tax is lost each year because companies shift their profits between jurisdictions. That’s roughly $240 billion.

A change like this could make a huge difference to those companies now dominating global investment markets – and the lives of people across the world too.