In crafting new, clear and effective rules in this area, many things must be taken into account — including the need to coordinate with other countries (and not just OECD members).
1) The level of infrastructure and public education vary widely throughout the world. They arguably can be viewed as having the effect of being subsidies for business.
2) Countries that are members of members customs unions (e.g. the EU or NAFTA) and parties to networks of tax treaties to avoid double taxation may present special complexities that must be addressed.
3) The denial of internationally-recognized worker rights and reasonable environmental regulations do not provide legitimate “competitive advantages.” At the same time, it is understandable that companies explore moving production to countries have low-labor costs. If this is not permitted, people who have the misfortune to be born in poor countries have little opportunity to increase the quality of their lives other than by moving (which unleashes a whole set of issues).
4) It is difficult to assess the true tax rates for corporations as they differ by sector, taking advantage of certain tax holidays, the existence of export production zones and the existence of companies that conduct business outside the company in which they are registered pay a lower tax rate than those active (or sell) within the country’s territory.
That being said, countries that permit their banks and other institutions to engage in activities to facilitate tax evasion must be addressed.
Off-shore tax and banking havens are indeed a problem. They facilitate money laundering. Unfortunately, the U.S. does not regard tax evasion when committed abroad to be a predicate offence, instead following the so-called “revenue rule.” While there are legitimate reasons for this policy, I think they have the impact of making the U.S. seem hypocritical when it complains about problem of money laundering.
Finally, professionals (accountants, lawyers, etc.) should risk losing their licenses should they violate the rules that are ultimately adopted.