International Tax Avoidance: Barely Legal

Taxes may not be the most stimulating topic of conversation, but they are incredibly important, and this article does a smashing job of briefly identifying just how difficult and complex reform of the international tax system is going to be.

Jumping off from a brief comment about Ireland's very low multinational corporate tax rate, the article breezes through analyses of the tax avoidance techniques used by some of the biggest international names, Google and Amazon among them.  Through it all, one fact was really highlighted for me: this kind of tax avoidance, shifting of profits, and shrinking of the tax base is all LEGAL.  Countries lower their tax rates on purpose, and turn a blind eye to questionable profit sharing/hiding, in order to stimulate investment.  Ultimately, they're just after economic growth.  However, these practices (such as patent boxing or funneling profits through tax-exempt affiliates) may undermine that goal more than support it.  Especially in such a complex market as the EU, with so many companies going through financial crises, it has become extremely evident that a massive reform of the international tax market must be enacted soon.  As a final note, I thought it was particularly interesting how the manipulation of tax rates surrounding patents was involved. That's another big issue that must soon be confronted.