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Given the worsening crisis in public finances the international community has engaged to fight harmful tax practices of multinational enterprises. Numerous reports have demonstrated that they often pay only a marginal amount of taxes. According to the last OECD study some multinational use strategies that allow them to pay as little as 5% in corporate taxes when small businesses are paying up to 30%. Obviously, these-legal-strategies give them an unfair competitive advantage over smaller businesses. But even more significant is that all such practices erode the tax base of many countries. In this context, more than 140 countries, accounting for 90% of the world's economy, have expressed their deep concern regarding the aggressive practices of many multinational companies which try to avoid their tax liabilities. And this lead to absurd situations. A few examples: Barbados, Bermuda and the British Virgin Islands receive more foreign direct investment than Germany or Japan! The rocky Isle of Jersey is among the world's leading exporter of bananas! The most important outcome of the OECD's agenda should be the following: multinational enterprises will have to submit a country-by-country reporting of the taxes they already paid and of the profits they realised. But one of the most significant challenges will be to deal with the fiscal implications of the Internet economy.The relevant answer to this major issue would be to ensure the collection of VAT where consumption takes place. "As governments and their citizens are struggling to make ends meet, it is critical that all tax payers-private and corporate-pay their fair amount of taxes and trust the international tax system is transparent" said OECD Secretary-General A.Gurria. But the process will be more difficult and certainly lengthier than envisaged by many States.

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