“Global taxation policy has changed the economy of the countries over the past several years and there are so many reasons to believe that will continue to expand for some more years. Nowadays international tax policies are being built not only to raise revenue and redistribute wealth, but also to regulate corporate behaviour. Multinationals have to be increasingly be careful of balancing business growth with effective financial and reputational risk. There are 3 most important elements in the global tax sector shaping the way that multinationals are conducting business they are as follows:
Organisation for economic cooperation and development aims to shift profits to low or non-profit locations, to gain this it adopts or regulates various tax strategies. This affects all companies doing business in country that have registered in OECDS multilateral convention to prevent base erosion and profit sharing.
European Union is the name given to a subsidy provided by government which talks about corporate tax practices that are being investigated for shaping competition and free market, which is going to have an effects on all the companies who are the EU member states with favourable tax rulings from tax authorities.
Large scope of tax reforms includes a shift from one country to another country tax system in which US companies will pay taxes in country where profits are earned with significant measures to prevent movements of the US tax base from which it is going to affect all entities that have effectively connected income in the US.
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Keywords: OECD, BEPS, State Aid, US Tax Reforms, Tax Transparency.
