Uber used 50 Dutch shell companies to dodge taxes

The question is how much tax they should pay. To be fair and avoid double taxation, you'd roughly want to tax revenue in the US minus costs made to create that revenue. That quickly devolves into an endless fight to define exactly what contributes to US revenue, and which costs are made to create the US revenue.

It's easier to workaround that endless fight by ensuring that it doesn't matter where tax is paid.

No, there re absolutely special features of Netherlands and Ireland.

Ireland specifically had a tax setup that allowed the creation of a "virtual" European Headquarters that was not in any tax jurisdiction that sales could be booked against.

What exactly should they pay tax on?

AFAIK, most countries like the US go for a tax on profits, but profits of a multinational country are extremely hard to "locate", as in: in which country was the profit made?

Some obvious examples are IKEA stores licensing the rights to the IKEA brand from some company in the Netherlands, which means most stores in the US almost have no profits. Or starbucks USA buying extremely expensive (but high quality they say) beans from a company in Switserland... which is also part of the multi-national Starbucks holding.

These are obvious examples, but it is almost inherently hard to define where profits are made for a multi-national company as they almost always have revenue streams going in many directions and who says which national company is really adding value while others are almost profitless?

Otoh a revenue based system would also be rather hard to manage, especially if you want to prevent double taxation (both countries in the equation taxing the same revenue) as that almost requires profit based taxation again.

The US has ensured it gets its own share of the pie with jurisdictions like Nevada, New Mexico, Arizona and Delaware. The OECD offshore grey/black list is just a farce that ensured dark money moved from the traditional "Hollywood-jurisdictions" like Switzerland, Vanuatu and Cayman to places that are considered "clean".

Here is an excerpt from Treasure Islands: Tax Havens and the Men Who Stole the World[1]

> American corporations could cook up a version of what was known as a “Dutch Sandwich”—set up an offshore finance subsidiary in the Netherlands Antilles, then use it to issue tax-free Eurobonds and send the proceeds up to the American parent. The United States could argue that it did not have to tax this income from the Antilles, under the rules of its tax treaty with this former Dutch colony via its postcolonial relationship with the Netherlands. The U.S. Internal Revenue Service could easily have decided that the Dutch Sandwich was a sham and taxed the income. But it looked the other way. “These were Eurobonds, bearer bonds, which were virtually impossible to tax,” explained Michael J. McIntyre, a top U.S. expert on international tax, who was one of very few people in the United States to have opposed this at the time. “You British people were quite happy about (the tax-free, secretive Eurobond markets). And we wanted in. We wanted to attract the hot money too.”

> The United States sells financial secrecy not just at the federal level but at the state level too. Delaware is the biggest state provider of offshore corporate secrecy, but Nevada and Wyoming are the most opaque: They allow bearer shares, a vehicle of choice for mobsters and drugs smugglers, and they are particularly lax on allowing company directors and other officers to be named, hiding the identities of the real owners. Nevada does not share tax or incorporation information with the federal government and does not require a corporation to report where it does business. The IRS has no way of knowing whether a Nevada corporation has filed a federal tax return. Arkansas, Oklahoma, and Oregon are also routinely used for fraud by eastern Europeans and Russians, and, as noted, Texas and Florida are havens for illicit Latin American wealth. In the 1990s, the U.S. government gave millions in aid to help the former Soviet Union countries improve the security at their nuclear power plants. Much of it went missing. When the U.S. Department of Justice went looking for the money, investigators finally tracked it to anonymous shell companies in Pennsylvania and Delaware. Most cases involving financial market manipulations that the FBI has studied have involved U.S. shell companies from these states. The notorious “merchant of death” Viktor Bout, inspiration for the character played by Nicholas Cage in the Hollywood film Lord of War, alleged arms runner to the Taliban and other murderous organizations around the globe, operated through businesses in Texas, Delaware, and Florida.

[1] source: https://en.wikipedia.org/wiki/Treasure_Islands:_Tax_Havens_a...

well, the European rule is that the HQ of a company for tax purpose is where its orders are actually coming from. I don't have this vibe here.