Question

Discuss how multinational companies reduce their tax liabilities when
1. Obtaining debt finance from foreign group companies?

Answer 1

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The problem of companies being able to avoid taxes is the result of a malfunctioning global
tax system, where various loopholes are easy to exploit.

The lack of a common understanding between all jurisdictions, where some deviate from the others in order to increase income, is a problem that needs to be solved. As we describe in the last chapter of our thesis, several actions have been and are to be taken in order to prevent companies from
dodging taxes.

Most countries are now on board for a new global transparency agreement, and there is reason to believe that we will see changes in the near future, hopefully increasing the total amount of tax paid at a global scale.


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