Re: Race to the bottom
The International Corporate tax holidays are coming to an end.
I will believe that when I see it. Note that at the moment, the law prohibits transfer pricing, but in many cases that's exactly what many of the US tech (and even coffee) companies are doing. If the EU and national governments won't enforce the existing rules, nor clarify them, what are the chances that the very clever tax accountants and lawyers won't find a way round any new rules?
As much as anything, any new rules will undoubtedly be additive, rather than replacing existing rules, and that means greater complexity. Greater complexity means more chance of unintended outcomes, and more opportunity to find loopholes. Tax codes are no different to computer code: The bigger the volume of code, the more flaws it will have, and once you get to a critical mass, there's no way of fixing all the real and putative flaws, other than by starting again. And if national tax codes are a huge program, then all the international treaties and EU laws are code libraries - you link into those hoping for the best, but they're approximated for another purpose, and nobody has real control over whatever the outcome will be.
Biting the hand that feeds IT
