Countries reduce tax to attract more business

The planet is littered with hundreds of different nations and legal jurisdictions, each with its own peculiar set of tax rules.The businesses looks for gaps, opportunity and loopholes.Tax is big issues foe companies where they have to pay the taxes in higher rate.All the big expertise of the companies looks for , how best to arrange their affairs to minimise the total tax bill?. In this present era , where competition is high for the market  and the companies undoubtedly under competitive pressure to reduce cost, and tax is a cost.in order to minimise cost , the company look for loophole to pay less tax.So they search for the countries where they can pay less tax.For example ,for a US or Asian company choosing to expand into Europe, or to consolidate their existing European businesses, this inevitably presented a lot of decisions about where exactly to locate their factories, service- and distribution-hubs, and regional headquarters.Also , for instance ,Starbucks said that it sourced its UK coffee from its wholesale trading subsidiary in Switzerland.That may be sensible commercially - it's cheaper to have one team responsible for sourcing all of Starbucks' coffee, and Switzerland is apparently the centre of the world coffee-trading business.But it is hard escape the conclusion that Switzerland would not be a major centre for coffee trading in the first place if it did not charge a lowly 12% tax rate on the trading profits.

 However , this is an opportunity for the countries where there are not any businesses like in USA or UK. So those countries offer less tax rate to attract more businesses to come to their country. And business go their because of saving cost and tax is a big issues where companies have to pay in higher rate in some countries.For example,Ireland went out and out to cut their corporate tax rate to 12.5%, nakedly to attract more business. And Ireland attracted the businesses.Google was one business to take advantage of Ireland, locating its two data centres there, employing 3,000 people to co-ordinate marketing and sales of advertising space across Europe.Furthermore,In the case of Starbucks, the Netherlands even went so far as to offer the coffee chain a special and secret tax deal to win its headquarters business - something the UK tax authorities make a point of never offering.Also look at Luxembourg for example,if you buy an ebook from Amazon, it is the Luxembourg VAT rate of only 3% that you end up paying.