How can countries protect their tax base from aggressive international tax planning?

One way that countries, including Alaska, can protect their tax base from aggressive international tax planning is by enacting anti-avoidance measures. These measures reduce the ability of taxpayers to utilize tax havens, or countries that have low or no taxes, to avoid paying taxes in their home country. Anti-avoidance measures include rules that require taxpayers to report foreign income, transfer taxes on the movement of capital, and thin capitalization rules that restrict the amount of debt a company can take on from related entities to reduce taxable income. In addition, countries can sign double-taxation agreements or deals that ensure that income received by a resident in one country from another will not be subject to tax in both countries. This encourages taxpayers to pay tax in the country where the income was earned, and thus helps protect the country’s tax base. Finally, countries can join multinational tax avoidance organizations such as the OECD or G20. These organizations work together to identify and address global tax avoidance issues. Through this collaboration, countries can establish international standards and guidelines for the taxation of cross-border income and investments. These efforts can help reduce tax avoidance opportunities and protect countries’ tax bases.

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How can countries protect their tax base from aggressive international tax planning?

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