Tax Policy Challenges in the 21st Century

S. 392I. Introduction

A. Some General Remarks

Nowadays, tax evasion and tax avoidance by multinational enterprises (MNEs) is one of the most important topics in international taxation. Not that it is a new issue. Paying little or no taxes by MNEs through elaborate structuring of business affairs has always been a theme discussed amongst tax professionals and government officials; moreover, the schemes employed have been under the scrutiny of the judiciary as the distinction between what is legally permissible and what is not usually finally rests with the courts. The interest in tax evasion and tax avoidance by MNEs has been growing during the last couple of decades. The years following the global financial crisis witnessed unprecedented mainstream media attention (mainly in the United Kingdom and the United States) on ‘corporatetax dodging’ and the existing ‘tax gap’, which has made the general public aware of some distressing facts of MNEs’ tax bills. By way of example, journalists’ articles have reported that, despite huge sales in the United Kingdom, companies such as Starbucks (GBP 3bn in sales in over a decade in the UK) and Microsoft (reporting some GBP 1.7bn in revenues from the UK...