Recent years’ weak economic development has put pressure on many governments and increased their need to generate tax revenues. Along with this, companies’ tax practices have come under scrutiny in the public debate raising risks associated with aggressive tax planning practices.

Multi-national companies (MNCs) have the legal right to minimize their tax burden by for example utilizing specialised economic zones or by shifting their profits to jurisdictions known as low-tax jurisdictions.

According to the OECD there are several studies indicating that there is an increasing segregation between the location where companies’ business activity takes place and the locations where profits are reported and taxes are paid.

Aggressive corporate tax structures lead to several problems, such as an uneven playing field between MNCs and local businesses, while also undermining national development by eroding countries’ tax bases.

Read our thematic report on responsible corporate tax practices here.