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IMF: Corporate tax schemes hurt developing countries

Published on Jun 26, 2014 6:21 AM

WASHINGTON (AFP) - Developing economies are increasingly hurt by the way global corporations exploit taxation differences and move profits to low-tax locations, according to an International Monetary Fund report on Wednesday.

But few countries can protect themselves in a competition for direct investment that increasingly appears like a "race to the bottom" in setting corporate tax rates, the IMF said.

Moreover, companies are increasingly able to shift and relocate more intangible assets - like intellectual property - to avoid taxes.

The IMF said that the more countries give in to investors' requirements on taxes, the more they are hurting the global community.

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