Journal of Research and Development in Comparative Law

Journal of Research and Development in Comparative Law

"Tax Transparency against Aggressive Tax Planning of Multinational Corporations; A Comparative Study of the European Union and Iran

Articles in Press

Document Type : scientific research paper

Authors
Mohammadreza Zadehnajaf 1
Mohammadreza Alipour 2
Nader Mirzadeh Koohshahi 3
Vali Rostami 4
1 PhD Student in Public Law, Faculty of Law, Theology and Political Scinece, Islamic Azad University Science and Research Branch, Tehran, Iran.
2 Assistant Professor, Faculty of Law, Theology and Political Scinece, Islamic Azad University Science and Research Branch, Tehran, Iran.
3 Assistant Professor, Faculity of Law and Political Science, University of Tehran, Tehran, Iran.
4 Prof., Department Public Law; Faculty of Law and Political Science, University of Tehran, Tehran, Iran.
10.22034/law.2025.2048711.1586
Abstract
Considering the cross-border activities of multinational corporations, their aggressive tax planning represents a global challenge requiring a comprehensive solution. Recognizing that multinational corporations play a crucial role in financing governments, states have consistently sought to ensure compliance with tax regulations through improved governance and the establishment of various mechanisms. However, multinational corporations, moving beyond tax evasion and avoidance, have increasingly engaged in aggressive tax planning. By exploiting discrepancies in the tax systems of different countries, they aim to minimize or evade their tax obligations entirely. In today's globalized economy, alongside the significant and fundamental changes in international tax law, addressing aggressive tax planning has become a critical priority for many nations. Effective tax governance in combating this issue hinges on enhancing tax transparency through the exchange of tax information. The European Union has taken a leading role in countering the aggressive tax planning of multinational corporations by implementing innovative mechanisms for exchange of tax information while safeguarding professional and commercial confidentiality and ensuring respect for corporate privacy. This study, using a descriptive-analytical method and data collection through documentary (library) research, seeks to address the following question: What mechanisms have the European Union and Iran implemented to promote tax transparency in combating aggressive tax planning by multinational corporations, and what measures can Iran take to improve these mechanisms? The research findings indicate that the European Union has implemented various tax transparency measures, including on-demand, automatic, and spontaneous tax information exchange, as well as country-by-country reporting specifically for multinational corporations. In contrast, Iran's sole tool for cross-border tax transparency is the on-demand exchange of tax information, as outlined in its double taxation agreements. Consequently, the study recommends that Iran adopt automatic and spontaneous exchange methods, implement country-by-country reporting, and negotiate tax information exchange agreements, particularly with tax havens, to strengthen its tax transparency framework.
Keywords
European Union
Multinational Corporations
Base Erosion and Profit Shifting
Aggressive Tax Planning
Transparency
Exchange of information

Subjects

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Journal of Research and Development in Comparative Law

Articles in Press, Accepted Manuscript
Available Online from 28 January 2025