International Tax Evasion: Methods, Impacts and Means of Combating It Through International Cooperation and National Legislation

Abstract

Tax evasion is one of the most widespread forms of corruption in many countries, negatively impacting economic growth and the overall investment climate. The issue has taken on a global dimension, as individuals and corporations conceal their profits or shift them to jurisdictions with low or no taxation in order to illegally reduce their tax burden. International tax evasion has become one of the major challenges facing modern financial and economic systems, particularly with the rise of capital mobility and multinational corporations.

The main mechanisms of international tax evasion include profit shifting to tax havens, transfer pricing manipulation, shell company registration, and financial concealment. These practices undermine public revenues, reduce the ability of states to fund public services, violate the principle of tax fairness, and grant large corporations unfair advantages over local economies.

Therefore, it is essential to highlight these aspects and identify the measures states use to counter this phenomenon. Several international bodies, such as the Organisation for Economic Co-operation and Development (OECD), have launched initiatives like the BEPS Project, and implemented systems like the *Common Reporting Standard (CRS) to enhance tax transparency. However, the effectiveness of these efforts largely depends on international cooperation and the modernization of domestic legislation. At the national level, weak legal and regulatory frameworks and limited participation in international agreements hinder efforts to combat tax evasion. Nonetheless, introducing legislative reforms, strengthening oversight, and joining international tax information exchange systems are vital steps toward reducing this issue