Aggressive tax planning as a threat to national security

Abstract

The article examines the strategies of aggressive tax planning as a threat to state security. Aggressive tax planning practices are becoming more common. This poses multifaceted challenges to fiscal policy, economic stability, and national security. By conducting a comprehensive analysis of applied strategies, economic impacts, and potential policy measures, this study aims to provide information on the complex mechanism of tax evasion. The article discusses various strategies that companies use in aggressive tax planning. These strategies cover offshore tax havens, transfer pricing manipulation, royalty movement, "fine capitalization" and tax deferral, each of which uses legal nuances to minimize tax liabilities. The study examines the economic consequences of aggressive tax planning, focusing on significant revenue losses for governments around the world. Eroding tax revenues through aggressive tax planning reduces states ' ability to finance basic public services, contributing to budget deficits and economic instability. In addition, it creates material inequality, contributes to social unrest, and jeopardizes the nation's ability to solve national security problems. By analyzing these economic implications, this study highlights the urgency of considering aggressive tax planning as a fiscal and national security issue.