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The Emerging International Taxation Problems

Author

Listed:
  • 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
    Stillman School of Business, Seton Hall University, South Orange, NJ 07079, USA)

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.

Suggested Citation

  • James G. S. Yang & Victor N. A. Metallo, 2018. "The Emerging International Taxation Problems," IJFS, MDPI, vol. 6(1), pages 1-10, January.
    • Handle: RePEc:gam:jijfss:v:6:y:2018:i:1:p:6-:d:125077
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    References listed on IDEAS

    as
    1. Arel-Bundock, Vincent, 2017. "The Unintended Consequences of Bilateralism: Treaty Shopping and International Tax Policy," International Organization, Cambridge University Press, vol. 71(2), pages 349-371, April.
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    Cited by:

    1. Oliveira, Cíntia Carla Melgaço de & Brittes, José Luiz Pereira & Silveira Junior, Vivaldo, 2019. "Dynamic operating conditions strategy for water hybrid cooling under variable heating demand," Applied Energy, Elsevier, vol. 237(C), pages 635-645.

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