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

International tax planning is the process of legally minimizing taxes paid by individuals or companies to different governments. Countries can protect their tax base from aggressive international tax planning through several measures. First, countries can implement strong domestic laws to monitor international tax practices and prevent individuals or companies from manipulating the tax system. Tax authorities can also require extensive documentation from taxpayers, as well as offer incentives to report and penalize unreported offshore income or assets. Second, countries can enter into bilateral agreements with other countries to coordinate the exchange of information related to international tax practices. This allows countries to keep track of individuals or companies that are engaging in aggressive international tax planning. Third, countries can enter into multilateral agreements to establish a global standard for monitoring and regulating international tax practices. This would help to keep individuals and companies accountable for their taxes and ensure that they are not avoiding their fair share of taxes. Finally, countries can also take measures to increase public awareness of international tax planning practices. This can help individuals and companies understand how their activities can affect tax liabilities and how to avoid aggressive tactics. Overall, countries can take several steps to protect their tax base from aggressive international tax planning. Through strong domestic laws, bilateral agreements, multilateral agreements, and public awareness campaigns, countries can help ensure that individuals and companies pay their fair share of taxes.

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

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