The Emerging International Taxation Problems

James G. S. Yang and Victor N. A. Metallo
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James G. S. Yang: Department of Accounting & Finance Montclair, Montclair State University, Montclair, NJ 07043, USA
Victor N. A. Metallo: Department of Accounting & Finance Montclair, Montclair State University, Montclair, NJ 07043, USA

IJFS, 2018, vol. 6, issue 1, 1-10

Abstract: The problems of tax evasion and tax avoidance are as old as taxes themselves. Between 2015 and 2016 alone, many U.S. multinational corporations were involved in tax disputes with the European Commission. From a historical perspective, these disputes are unprecedented as they have resulted in tremendous amount of tax penalties. The most notable case was Apple for €13 billion of unpaid tax. This article discusses what tax strategies these corporations used that caused such disputes. It specifically investigates seven corporations: Apple Inc., McDonald’s, Starbucks, Fiat, Amazon, Google, and Ikea, and elaborates on the following tax strategies: high royalties, intercompany transfer pricing, intercompany loans, and source of income in a high-tech industry. This article also discusses the European Commission’s charges of tax evasion and how these corporations defend against them. When multinational corporations are operating abroad, they must observe not only domestic tax law but also international law.

Keywords: Keywords; international taxation; the European Commission; worldwide tax system; territorial tax system; domestic-sourced income; foreign-sourced income (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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