Global tax competition threatens national economies, but solutions are on the horizon.
Corporate income tax rates are decreasing due to tax competition, benefiting multinational firms over national companies. However, CIT is still important for national tax systems, taxing profits and foreign shareholders, guiding production, and taxing large firms. Globalization makes it harder to determine where profits are made and taxed. The OECD and European Commission have plans to combat tax avoidance, with the CCCTB being a major project.