n Improve the existing transfer pricing system with the
Arm’s Length Principle as much as possible – e.g., by
applying profit split and similar methods;
n Strengthen anti-avoidance rules;
n Set up public centralised registers of companies,
trusts, foundations, and similar legal entities, which
display the economic beneficiary of the entity;
n Restrict the deductibility of certain capital gains such
as interest, particularly in the case of effective nontaxation
(subject-to-tax clause);
n Apply withholding taxes, particularly for income on
intellectual property rights, but not with the result of
lowering taxes;
n Improve the rules on the economic activity of companies
in order to prevent letterbox companies;
n Include the above recommendations in double taxation
agreements, and use the crediting principle instead
of the exemption principle as a general rule;
n Introduce comprehensive country-by-country reporting
for all types of corporations;
n Investigate and apply a compulsory and comprehensive
unitary taxation, either at regional or even at
global level.
The G20, at their heads of state summit in 5–6 September
2013, as well as countries around the world need to
act in order to prevent TNCs from avoiding and evading
their taxes. While some of the problems discussed here
can be solved unilaterally, there are others that could be
dealt with more effectively through intergovernmental
cooperation at the regional or global level.