The low tax bills of Google, Amazon and other large corporations have prompted the world’s authorities to act - but Rick Krever, head of Business Law and Taxation at Australia’s Monash University does not predict major change. He said: ‘…The problem is, multinationals operate across many jurisdictions. All those jurisdictions want to claim taxing rights. Under the current system, multinationals can decide where in the world their profits are located. The shareholders are absolutely indifferent. And if you can locate them in the place that reduces your taxes, the shareholders are happy.’ 

Profit shifting

However, there appears to be a move towards greater transparency. In October 51 countries signed up to an agreement through which, from 2017, they will automatically start to exchange information collected by financial institutions. This move to tackle ‘base erosion and profit shifting’ could mean that companies are under greater pressure not to shift the official address of their operations to jurisdictions which offer low tax rates. Source: State Journal