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

Countries can protect their tax base from aggressive international tax planning by taking a variety of measures. First, a country can require multinational corporations to report detailed financial information accurately and transparently. This information could include all income, assets, and investments held in foreign countries, and would help national governments better understand how money is being managed, and where taxable income is generated. Second, countries can also implement transfer pricing regulations, which set rules on how income between related entities should be allocated and taxed. This helps to ensure that profits are taxed at a fair rate in each country and that country-specific tax loopholes are not being used to avoid paying taxes. Third, countries can enter into Double Taxation Agreements with other countries. These agreements set thresholds and standards related to taxation and allocate the right to tax between two or more countries. This ensures that both the countries involved in a transaction are able to benefit from the taxation, and prevents losses due to aggressive tax avoidance. Finally, countries can invest in education and training for their tax administration and enforcement teams, to ensure that they are able to effectively identify and tackle any activities that may be related to aggressive international tax planning. This will help countries to stay ahead of any tax avoidance and evasion activities, and ensure that the tax base for the country is protected.

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

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