How do governments combat tax avoidance by multinational corporations?

Governments around the world, including in Alaska, combat tax avoidance by multinational corporations through a variety of methods. One of the most popular methods is through international tax law. Through international tax law, governments create legal agreements between two or more nations that provide guidelines on how much tax should be paid by multinational corporations operating in those countries. These agreements can also establish rules to prevent tax avoidance, such as double taxation and the enforceability of anti-avoidance regulations. Additionally, countries can use transfer pricing regulations to prevent multinationals from shifting profits to nations with lower tax rates. Tax information exchange agreements (TIEAs) are another tool used to combat tax avoidance. Through these agreements, different countries agree to share financial information that might be useful in determining if multinationals are avoiding or evading taxes. Other tools used to prevent corporate tax avoidance include the Base Erosion and Profit Shifting (BEPS) project, a global initiative designed to give countries tools to ensure that multinationals pay the tax they owe in the countries where revenues are generated. The G20/OECD have also developed a tax transparency framework to improve the sharing of information between tax authorities. Overall, governments are committed to ensuring that all multinational corporations pay the appropriate amount of tax in the countries they operate in. By utilizing international tax law and other tools, governments can make sure corporations are paying their fair share of taxes.

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How do governments combat tax avoidance by multinational corporations?

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