Concerns about corporate tax dodging

Governments around the globe are reviewing corporate tax returns much more closely these days. At a time when public budgets are tighter than ever, the New York Times reports that government officials worry that multinationals may be gaming the system:

Companies like Microsoft and Google have long pushed their effective tax rates down by moving functions to lower-rate jurisdictions like Ireland, which has a low tax rate on royalty income — as low as zero — and a 12.5 percent corporate tax rate, against the 35 percent U.S. rate.

… A recent report from the charity Christian Aid, which is concerned with the impact on developing countries, estimated that governments lose $160 billion a year when companies working across borders misapply the rules.

Even the IRS is opening new offices abroad to ensure that the U.S. treasury is receiving all the tax dollars it is owed.