International Tax Avoidance Still Problem
LONDON – Both developed countries and developing countries are loosing out on tax revenues due to a continued lack of progress in fighting international tax avoidance.
Large multinational businesses are still using international tax rules to avoid paying taxes in the countries where they raise profits, according to information contained in a new collaborative report released on November 10th by Tax Justice Network, Oxfam, Global Alliance for Tax Justice and Public Services International.
According to the results in the report, in 2012 US multinational businesses shifted as much as USD 700 billion of profits to jurisdiction with not corporate income taxes.
The level of profits shifted is equivalent to approximately a quarter of the total profits earned.
It was claimed that the large levels of profit shifting are indicative of the fact that even developed countries with up-to-date tax systems and well-staffed tax authorities are unable to adequately tackle the problem of tax evasion, ultimately leading to reduced tax revenues and tightened budgets.
However, the problem of profit shifting is even further compounded in developing nations which are heavily dependent on taxing a fewer number of large organizations.
