The Role of International Taxation in Shaping Multinational Corporation Strategies
The Role of International Taxation in Shaping Multinational Corporation Strategies

Author(s): Presiana Ilieva
Subject(s): Politics / Political Sciences, Politics, Economy, Supranational / Global Economy, Business Economy / Management, Economic policy, International relations/trade
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: Multinational Corporations (MNCs); corporate taxation; global minimum tax rate; tax harmonization; sustainable development
Summary/Abstract: European countries seek sustainable development by attracting multinational corporations (MNCs) to invest in targeted sectors. However, this strategy can lead to tax abuses, as some countries offer lower corporate tax rates to attract investors. In response, the European Union has enacted directives, including the Global Anti-Base Erosion Rules, to ensure fair international taxation and establish a global minimum tax rate of 15%. This paper examines the implications of these regulations, particularly the Income Inclusion Rule (IIR) and Undertaxed Profit Rule (UTPR), which aim to harmonize taxation across jurisdictions. Additionally, the paper explores how comparative advantage per jurisdiction influences MNC strategies, guiding their investment decisions based on local resources and tax environments. Ultimately, effective taxation policies are vital for creating efficient international markets and fairer tax systems.

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