Tax Havens & Transfer Pricing : A Challenge to Global Governance
With the advent of globalisation, the capital has highly become mobile with easy and no barrier flow between the nations. As a result of it now a single corporate taxpayer can deploy capital across multiple taxing jurisdictions. This incongruity slowly developed pique between domestic taxing jurisdictions and global capital. Transboundary flow of capital to global corporate income has led to deduction in national economy. The biggest problem arising from this phenomenon is the emergence of tax havens. Tax havens are generally offshore countries meant to provide foreign individual and business a very meagre or no tax liability in a politically and economically sound environment. Apart from this tax havens are known for their nature of financial secrecy where limited or no information is shared or exchanged with foreign tax authorities. Tax havens have very flexible banking laws and regulations requiring no residency or business presence for their customers. This is a two way benefit as Offshore tax havens extract enormous benefit from flow of capital in their economy through this source. One of the biggest problem arising from Tax heaven system is the Transfer Pricing issue. Multi-National Companies (MNC) and corporates deliberately shift their profits to the tax havens through the intra firms transfer pricing leading to Transfer pricing.Over the years the volume of activities of the MNCs have shoot up like anything owing to the flexible laws provided by the tax haven jurisdictions. MNCs are equipped with uncountable means of shifting profits through transfer pricing, and ample opportunity is being laid down by the tax havens. Various nations have taken this issue with topmost priority. Dealing with this problem is not any simple task. Tax jurisdictions have come out with 2 ways to tackle this problem: i) Through the application of arm's length principle to determine the tax payable by MNCs in a particular jurisdiction ii) Through using a formula to allocate tax payable by MNCs between countries.This crisis has taken the form of a global problem. Every single country is fighting with this problem. This crisis is so big now that no single country or group of countries can hope to resolve it. Time has come up where international community as a whole must set up any instrument to cure this tax haven
Year of publication: |
2020
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Authors: | Saikia, Neep |
Publisher: |
[2020]: [S.l.] : SSRN |
Subject: | Verrechnungspreis | Transfer pricing | Steueroase | Tax haven | Global Governance | Global governance | Welt | World | Multinationales Unternehmen | Transnational corporation | Internationales Steuerrecht | International tax law |
Saved in:
freely available
Extent: | 1 Online-Ressource (50 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 01, 2019 erstellt |
Other identifiers: | 10.2139/ssrn.3538991 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10012841467
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