Many Member States face problems when determining the taxable profits which derive from economic activity carried out by international companies in their territory. While this development has been especially relevant in the EU due to its unique characteristics such as a single currency area and a Single Market with 28 different tax systems, the overall trend of increased capital mobility and tax competition can also be observed at the global level.
In order to ensure that taxes are paid where the economic activity takes place, and to eliminate profit shifting, it is important to act on various aspects: strengthening domestic tax rules, addressing Tax Treaty issues, enhancing transparency and building a common approach towards third countries.
