Countries in the EU have discovered that some important worldwide companies or groups, which report huge profits for their national shareholders, in fact pay little or no Tax on Profits when their products are exported, to the EU for example.
However, first of all, one must understand that there is an unwritten basic rule which states that "it is not illegal to avoid paying tax if the measures taken are not illegal" !
This therefore means that, if a country considers that there has been an evasion of paying taxes which are "morally" due, then new tax laws and legislation must be passed to plug all the loopholes which permit such evasions !
Certain well known international Groups and Companies have been using "tax haven countries" to hide profits on sales to companies they "dominate" in the EU. These same profits would have been reported by the EU companies and taxed, if the cost and terms of purchases had been much lower !
The techniques used can vary but generally profit margins on the resale of such goods (or even services) by dominated buying companies are very low, and/or, the buying company overheads are abnormally high !
When the buying companies resell imported goods, even when they are a subsidiary or a controled company of a Group, they should make a normal "gross operating profit" which in turn should result in a "normal taxable profit" !
If this is not the case, the aim of any new tax legislation must be to permit Tax Inspectors by law to propose a restatement of results of the local dominated company, based on a "notional profits tax basis" !
When companies avoid paying tax by using "tax havens" is it not the Citizen taxpayers who suffer ! All Governments need tax income from somewhere !