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. 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. In its Q2 earnings report on Monday, Palantir made no explicit reference to earnings from its European subsidiaries. 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.