Fraud, avoidance or optimisation

I found another sentence to write about on Page 29 of the most boring book in the world:

“Tax administrations should not automatically assume that associated enterprises have sought to manipulate profits” and avoid taxation.  (Note 1)

This is a silly sentence.

Of course, enterprises manipulate profits to pay as little tax as possible. They don’t call it ‘manipulate’ of course, they call it optimisation at best, or tax avoidance when being honest. It is now well known that multinational companies pay little if no taxes in high taxation countries, and maximise profits in low tax, or even better, zero tax countries. And they use this boring book to justify it. (Note 2)

But the authors go on to admit this:

“Transfer pricing policies may be used for” tax fraud and tax avoidance. (Note 3)

Here, they state clearly that the book can be used for tax fraud. How about that for another silly statement, but even a silly objective for a book!

Note 1: Chapter 1, Paragraph A1.2 Page 29

Note 2: The most boring book in the world is ‘OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations’, January 2022

Note 3: Chapter 1, Paragraph A1.2 Page 29