Question

Even with defined rules and treatments, as well as processes established in tax treaties, differences of opinion and disputes develop when taxing jurisdictions overlap.

Please respond to all of the following prompts:

Please discuss some of the common factors and transaction types that arise for a multinational company that may create issues.

Does the international taxing structure operate efficiently and fairly?

Explain. What areas of the international taxing structure need improvement and how could it be improved?

URGENT: NEED ANSWER ASAP

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Answer 1

1)-THE BASIC FACTORS AND ISSUE REGARDING MULTINATIONAL COMPANIES IS RELATED TO INTERNATIONAL TRANSACTIONS BECAUSE INTERNATINAL TRANSACTIONS ARE THOSE TRANSACTIONS WHICH ARE UNDERTAKEN BETWEEN TWO RELATED ENTITIES AND ALSO THESE TRANSACTIONS DOES NOT SPECIFICALLY FALL UNDER PURVIEW OF ANY SPECIFIC TAX LAWS OF ANY SPECIFIC COUNTRY.BECAUSE THESE TRANSACTIONS ALTHOUGH RELATED BUT THEY ARE UNDERTAKEN INTERNATIONALLY WHICH MEANS CROSS BORDER TRANSACTIONS OR TRANSACTIONS BETWEEN TWO DIFFERENT NATIONS.THEREFORE ISSUES REGARDING TRANSACTIONS GENUINENESS AND ITS FAIRNESS COMES INTO EXISTENCE AS THE PARTIES ARE RELATED IN TERMS OF CONTROLLING INTEREST OF SIGNIFICANT INFLUENCE OR THROUGH VOLUME OF TRANSACTIONS OR BY ANY OTHER MEANS AND HENCE THERE CAN BE A CHANCE OF MANIPULATION IN SUCH KIND OF TRANSACTIONS.

                                    

2)-EVERY TAX STRUCTURE IS AIMED AT ENSURING EFFICIENT AND SMOOTH FUNCTIONING OF TAX LAWS.SO CURRENT INTERNATIONAL TAX STRUCTURE ARE ALSO INDEED EFFICIENT AS FAR AS POSSIBLE BUT YES TO MAKE IT MORE STRINGENT IT REQUIRES LOT OF COORDINATION BETWEEN THE DIFFERENT NATIONS AND ALSO COOPERATION AND MUTUAL TRUST IN AREAS OF IMPLEMENTING A PROPER INTERNATIONAL TAX MECHANISM.

3)-THE AREAS REGARDING TRANSPARENCY AND RESPONSIBILITY NEEDS IMPROVEMENT.AS IMPROVING THESE AREAS WILL HELP IN UNDERSTANDING BETTER OF ALL THE INTERNATIONAL BUSINESS CONNECTIONS AND THUS A GREATER TAX BRACKET CAN BE CREATED.IT CAN BE IMPROVED BY MAKING LOT OF COOPERATIVE AND MUTUAL AGREEMENTS BETWEEN DIFFERENT NATIONS REGARDING THE DISCLOSURE OF FINANCIAL INFORMATION SO THAT THE GREATER TAX REVENUE CAN BE GENERATED AND ALSO DISCLOSURE OF INFORMATIONS INVOLVING BUSINESS CONNECTIONS BETWEEN DIFFERENT COUNTRIES CAN REALLY HELP IN IMPROVING INTERNATIONAL TAX MECHANISMS.