(a) the Tax Implications for Bill Bates as He Is Working in Country B He Would Have Withholding Tax Even Though He Is Only a Temporary Resident of Country B. for This Reason Bill Bates Would Be Allowed to Get an

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Submitted By karten
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Question 3

Government around the world are becoming increasingly sensitive to the loss of revenue resulting from multinational companies moving into other jurisdictions, most particularly tax havens, to lower their overall rates of tax, what are some of the measures that can be adopted to prevent such revenue loses?

A tax haven is a state or a country or territory where certain taxes are levied at a low rate or not at all while offering due process, good governance and a low corruption rate.

This is another important technique where the multinational companies can reduce their tax liability. If a company wants to expand and conduct their business in the country where the tax rate is very low or no tax rate, then they can reduce their tax liability to zero or very minimal amount.

Tax havens are an internal fight as tax jurisdiction is an integral part of sovereignty and with this in mind, we should consider the measures usually used by states in order to prevent the use of tax havens: general avoidance provisions, the establishment of foreign exchange control and mandatory withholding of tax on transfers abroad, the creation of provisions against base companies, specifically by attributing income earned by such companies to the resident partners who control them, as well as the introduction of legislative giving powers to the tax authorities to adjust taxable profit by reason of special relations with another taxpayers.
Tax havens make it more expensive for developing countries to collect taxes, lead to inefficient use of resources, undermine the workings of the tax system and make it possible for power elites to enrich themselves at the expense of the community. The most important damaging effect is perhaps that tax havens help to give power elites incentives to weaken public institutions, institutional quality and governance in their own country.…...

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