Palantir, which holds contracts with multiple European governments, has paid relatively little tax in Europe, according to a new report.

Researchers from the Centre for International Corporate Tax Accountability and Research (CICTAR), a non-profit organisation, and the European Public Service Union (EPSU), a trade union federation, found that Palantir reduced its tax liability in the region by shifting a portion of its revenues abroad.

Co-founded by Peter Thiel, the software company has drawn controversy for years over the surveillance capabilities of its technology, which critics contend raise privacy concerns.

The clients Palantir chooses to work with — including the military, law enforcement, and immigration services — have also fuelled this debate.

Palantir has secured significant success selling data analytics services to governments across Europe, most notably in the UK, France, Germany, Sweden, Spain, and Italy.

Securing major government contracts has boosted the company’s regional revenues. However, according to the CICTAR and EPSU report, Palantir employs tax strategies that facilitate what is known as base erosion, allowing the firm to lower the amount of tax it pays in Europe.

According to the report, the company achieves this by paying service fees to its US subsidiaries and introducing deductible expenses that diminish its taxable profits in Europe.

Consequently, while the effective tax rates applied to Palantir’s European operations appear high, the company manages to report low pre-tax profits.

Meanwhile, tax rates in the US remain significantly lower than those in Europe.

This practice extends to Palantir’s operations in the UK, which sits outside the EU.

None of the practices detailed in the report are illegal, and many large multinational corporations structure their operations in this manner to reduce their tax liabilities.

However, CICTAR and EPSU argue that base erosion is particularly problematic in Palantir’s case, emphasizing that while the company receives payments from governments for delivering services, it minimizes its contribution to the taxes that fund those very services.

Jan Willem Goudriaan, General Secretary of EPSU, said in a statement:

“Governments contract with Palantir to strengthen national security; but Palantir, by avoiding taxes, undermines public services, including national economic security.”

Although Palantir is deeply integrated into regional public service delivery, European alternatives such as France’s Chapsvision are gaining increasing traction.

Germany’s domestic intelligence agency announced that it will switch from Palantir to Chapsvision. In June, the French intelligence agency also announced that it would begin working with the domestic company.

The Federation of German Security and Defence Industries (BDSV) represented 602 companies as of July, marking a 50% increase compared with November 2025.

According to figures obtained by Euractiv, this figure corresponds to a nearly sixfold increase compared with 2021, prior to the outbreak of the war in Ukraine.

At that time, the Federation had only 111 registered members.

One third of the members are registered in Bavaria. A strong industrial cluster has also been established in North Rhine-Westphalia, whilst Berlin is rapidly closing the gap in this field.

The German government aims to allocate 3.5% of its GDP to defence by 2029.

Germany’s defence expenditure is expected to reach approximately 140 billion euros in 2027. No other European country comes close to this figure.

As a result, the defence sector in Germany is benefiting from these developments and expanding rapidly.

The country’s target of building Europe’s most powerful army, alongside its efforts to restructure the defence sector by setting aside more than 500 billion euros for defence investments over the next few years, is already reflected in the industry’s profits.

Four German companies are included in the top 100 global arms companies index produced by the Stockholm International Peace Research Institute (SIPRI).

According to the institute, the combined defence revenues of these companies increased by 36% to reach approximately 13 billion euros.

However, these major players do not constitute the majority of the sector represented by the BDSV.

Instead, new defence startups and manufacturers exploring the dual-use aspect of the sector account for the majority of new members.

Spain has asked other European governments not to criticise Morocco publicly over its role in the Ceuta migration crisis.

Madrid made the request during an online meeting of interior ministers yesterday (4 August), asking for negative messaging regarding Rabat to be prevented.

According to Euractiv, several participants at the meeting questioned how 72,000 people could enter the Spanish territory in North Africa in such a short space of time.

Spain’s appeal underlines the desire of the EU, which does not want to anger a key partner that will be of vital importance in managing future migration flows to Europe.

Rabat has also long been an ally of the EU on “counter-terrorism” and intelligence sharing.

Asked at a press conference on Tuesday who was responsible for triggering the crisis, Spanish Interior Minister Fernando Grande-Marlaska replied, “There does not necessarily have to be someone to blame.”

Except for an implicit reference by the Defence Minister, Spain avoided publicly criticising Rabat.

Von der Leyen proposes “more financial support for Morocco”

A Western government source told Euractiv that Morocco was believed to have at least tacitly approved the influx into Ceuta, and that the event was likely a political warning to Madrid.

Tensions were also fueled by false claims circulating on social media that the Spanish Supreme Court had issued a ruling prohibiting the forced “immediate” return of irregular migrants who reached Ceuta and Melilla by sea.

Shortly afterwards, Western officials also claimed that “actors in the Russian disinformation ecosystem” reacted “very quickly and on a large scale” to the events on the Spain-Morocco border.

German Chancellor Friedrich Merz explicitly called on Morocco to act and take back the migrants.

However, although other EU leaders, analysts, and media reports questioned how such a large-scale crossing could take place without at least a relaxation of normally strict border controls, they refrained from referring to the kingdom’s responsibility.

European Commission President Ursula von der Leyen reiterated the principle that migrants should not be used as tools to exert pressure on the EU, but she did not mention Morocco by name.

As the European Commission considers deepening ties between Brussels and Rabat, von der Leyen raised the proposal of offering more financial support to Morocco.

“Russian disinformation” warnings from the EU

Rather than blaming key partners, the European response shifted the focus largely to the role of human traffickers and the possibility that disinformation on social media may have amplified the criminals’ messaging.

This was also one of the main messages Rabat presented to the public. Interior Ministry spokesman Rachid Khalfi on Sunday blamed the “exploitation of the digital space” for creating the impression that entry into Europe via Ceuta was easy and carried no legal consequences.

Morocco also blamed the Spanish court ruling that sparked speculation, stating that Madrid should have foreseen these consequences.

EU Migration Commissioner Magnus Brunner said in a statement on Tuesday that Europol, the EU agency tasked with supporting national law enforcement agencies, was investigating potential disinformation cases linked to the crisis.

EU ambassadors and ministers discussed the role of disinformation in the crisis this week and reached a consensus on the need for better intelligence sharing.

According to sources, the European External Action Service has begun examining whether “Russian actors” attempted to exploit the incident on social media networks for political purposes.

EU border agency Frontex also aims to have its mandate expanded to include authority to monitor disinformation spreading on social media, as part of an upcoming review by the European Commission.

However, there is no clear independent research or investigation showing that a coordinated campaign was conducted before the events of last week.

Italy dials down the Schengen threat

On the other hand, Italy’s Interior Minister said on Tuesday that Spain should not “take personally” Italy’s move to tighten border controls.

Matteo Piantedosi told EU ministers during the online meeting held to address the short-lived Ceuta migration crisis, according to remarks shared with journalists, “This is in no way a measure directed at Spain or any other partner.”

Piantedosi sought to defuse tensions in a debate that had intensified since Rome led criticism against Spain last week over its management of the influx of approximately 60,000 Moroccans.

The government of Giorgia Meloni, backed by Denmark and 20 other countries, accused Madrid of creating a pull factor through its pro-migration policies and launched month-long checks on arrivals from Spain at sea and air borders.

The Italian minister stated that the measure was legal, argued that other countries also frequently implement their own temporary internal border controls, and presented Italy, particularly during the Lampedusa crisis in 2023, as a “historical victim of unbalanced load sharing in the EU” regarding migration.

The minister did not repeat the criticism Italy had directed at Spain in recent days. Instead, he used his speech to promote a strategy of offloading asylum applications to non-EU countries, including Albania.

Speaking at a press conference following the meeting, Spanish Interior Minister Fernando Grande-Marlaska said he hoped Italy would abandon temporary border controls.

The Spanish minister added that 70,000 of the 72,000 people who entered Ceuta have now returned to Morocco.

Criticism of Madrid softens

Several ministers, diplomats, and officials stated that a consensus was reached at the meeting to end the political tensions that had divided the EU over the past few days and to focus on technical work to strengthen the EU’s migration deterrence.

Two diplomats said no minister at the meeting demanded Spain’s suspension from the Schengen area.

Grande-Marlaska described the atmosphere of the meeting as constructive, noting that the countries that had directed the harshest criticism at Madrid last week had “reconsidered their views.”

The minister added that the risk of compromising the integrity of the Schengen area was never at issue.

Denmark, which had harshly criticized Spain over the Ceuta crisis, also sent a positive signal.

Minister for Integration Morten Bodskov stated in a post-meeting announcement that he was “very pleased that Spain acted quickly.”

Just as at Monday’s meeting of ambassadors, the speed of Spain’s return of migrants to Morocco drew widespread praise.

Reactions to Sanchez’s “legal migration” plan continue

Most EU governments remain firmly opposed to Pedro Sanchez’s controversial plan to legalise approximately 500,000 migrants living in Spain without the required documentation, arguing that it encouraged migrants to cross into Ceuta.

EU Migration Commissioner Magnus Brunner told reporters after the meeting that he understood Italy’s reaction, noting that citizens were concerned about the influx of migrants from Morocco.

Brunner said, “Looking at it from every angle, Europe has not had this much control over illegal migration in decades.”

Before the Ceuta crisis, the European Commission was already planning to present measures in September to strengthen the EU border agency Frontex, which was not deployed last week.

Ministers aligned around the action plan outlined in European Commission President Ursula von der Leyen’s letter sent to Pedro Sanchez on Monday.

Irish Minister for Justice and Migration Jim O’Callaghan, who chaired the videoconference, said, “There was a shared understanding of the need to relentlessly continue the fight against migrant smuggling networks, increase returns, strengthen EU borders, build deep partnerships with third countries, and improve foresight capabilities.”

Belgian Prime Minister Bart De Wever called for an urgent meeting of EU leaders to discuss the root causes of the events in Ceuta in an interview with Belga prior to the meeting.

However, two EU officials indicated that this was unlikely.

The EU will return to the matter at an informal meeting of interior ministers scheduled for October and at the next European Council meeting to be held in the same month.