Research on the Dilemma of Anti-Tax Avoidance Measures in Developing Countries and Their Response

Abstract

Nowadays, tax avoidance measures that MNEs used have brought negative effects to different countries of various degrees, especially the developing countries, whose loss is much bigger than developed countries. This paper firstly concludes with anti-avoidance measures that developing countries use generally and then uses Brazil and India as examples to do the research. The study finds out that current anti-avoidance measures in many developing countries are characterized by insufficient legislative and administrative enforcement capacity, overly aggressive regulation in some cases and mostly reactive governments. Based on this, these problems can be attributed to the social structure of developing countries, their economic structure, and the current state of the international community. Then through the analysis of the current advanced international anti-avoidance measures, what developing countries can learn can be discussed including carrying out administrative reform, setting up a reasonable structure to enhance tax information exchange and participating in international cooperation more actively. On the premise of balancing the tax avoidance regulations on MNEs and promoting the development of the countries, this paper discusses how developing countries apply these advanced measures to optimize their anti-avoidance regulations and minimize the loss including increasing regulation of corporate tax avoidance in the natural resources sector to ensure sustainable development in advantageous areas.