CROSS-BORDER TAX CHALLENGES AND SOLUTIONS IN GLOBAL FINANCE

CROSS-BORDER TAX CHALLENGES AND SOLUTIONS IN GLOBAL FINANCE

February 2024 | Joy Ojonoka Atadoga, Joseph Kuba Nembe, Noluthando Zamanjomane Mhlongo, Adeola Olusola Ajayi-Nifise, Odehyemi Olubusola, Andrew Ifesinachi Daraojimba, & Bisola Beatrice Oguejiofor
The article "Cross-Border Tax Challenges and Solutions in Global Finance" by Joy Ojonoka Atadoga et al. explores the complex issues arising from cross-border taxation and proposes solutions to mitigate these challenges. The authors highlight the primary concern of base erosion and profit shifting (BEPS), where multinational enterprises exploit tax rule gaps to shift profits to low-tax jurisdictions, eroding tax bases in higher-tax jurisdictions. This practice leads to revenue losses for governments and creates an uneven playing field for businesses. The article also discusses the complexity of international tax treaties and agreements, which often result in ambiguity and disputes over taxing rights and taxable income. To address these challenges, the authors advocate for a comprehensive approach that includes policy reforms and international cooperation. Key initiatives such as the OECD/G20 BEPS project are emphasized, aiming to modernize international tax rules and combat tax avoidance strategies. Enhancing transparency through country-by-country reporting (CbCR) and automatic exchange of information (AEOI) is also highlighted as crucial for improving tax enforcement. Additionally, the article explores the role of technology in streamlining tax compliance processes and improving cross-border tax administration. Digitalization and technological solutions are seen as opportunities to enhance efficiency and effectiveness in tax management. The importance of international cooperation, through multilateral agreements and information exchange mechanisms, is underscored to facilitate effective enforcement of tax laws and reduce opportunities for tax evasion. The authors conclude that addressing cross-border tax challenges requires concerted efforts from governments, multinational corporations, and international organizations. By implementing comprehensive solutions and fostering collaboration and innovation in global tax governance, stakeholders can create a fair and conducive environment for sustainable economic growth while upholding tax fairness and equity across borders.The article "Cross-Border Tax Challenges and Solutions in Global Finance" by Joy Ojonoka Atadoga et al. explores the complex issues arising from cross-border taxation and proposes solutions to mitigate these challenges. The authors highlight the primary concern of base erosion and profit shifting (BEPS), where multinational enterprises exploit tax rule gaps to shift profits to low-tax jurisdictions, eroding tax bases in higher-tax jurisdictions. This practice leads to revenue losses for governments and creates an uneven playing field for businesses. The article also discusses the complexity of international tax treaties and agreements, which often result in ambiguity and disputes over taxing rights and taxable income. To address these challenges, the authors advocate for a comprehensive approach that includes policy reforms and international cooperation. Key initiatives such as the OECD/G20 BEPS project are emphasized, aiming to modernize international tax rules and combat tax avoidance strategies. Enhancing transparency through country-by-country reporting (CbCR) and automatic exchange of information (AEOI) is also highlighted as crucial for improving tax enforcement. Additionally, the article explores the role of technology in streamlining tax compliance processes and improving cross-border tax administration. Digitalization and technological solutions are seen as opportunities to enhance efficiency and effectiveness in tax management. The importance of international cooperation, through multilateral agreements and information exchange mechanisms, is underscored to facilitate effective enforcement of tax laws and reduce opportunities for tax evasion. The authors conclude that addressing cross-border tax challenges requires concerted efforts from governments, multinational corporations, and international organizations. By implementing comprehensive solutions and fostering collaboration and innovation in global tax governance, stakeholders can create a fair and conducive environment for sustainable economic growth while upholding tax fairness and equity across borders.
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