Recent years have seen a renewed focus by international revenue authorities on ensuring that appropriate tax is paid by multi-national enterprises operating in their jurisdictions. The revenue authorities have been fortunate in some respects, with governments in many jurisdictions facing depleted coffers and open to any suggestions as to how to boost tax revenues. Given this environment, revenue authorities have found governments more willing to amend laws and change arrangements that have, in many cases, been in place for long periods of time on the basis that such changes will provide a quick fix for cash-strapped countries.
While it is clear in many cases that, existing tax and regulatory frameworks need to be modified to more appropriately deal with globalization and the allocation of tax revenues among the various jurisdictions multinationals operate in, such an environment is not necessarily conducive to good law or administration. In many cases, the long term ramifications of changes in law and policy at the behest of the revenue authorities are not fully considered before being announced or enacted.
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