Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
If there is any corporate fiscalist over here, feel free to correct me but I believe a lot of Group 2 entities don't follow the normal tax code because they have specific agreements with local govs outside of the common law. The idea is that the companies tell the govs "either we pay a lot of lawyers to avoid taxes and you get zilch and you can't do anything about it or we agree in advance on a small sum for you and you leave us alone."

If you want to get rid of that, you need to get rid completely of tax havens and to heavily regulate intangible transfers across subsidiaries of a same multinational (a shell game that moves profits and losses from one subsidiary to another, depending on which local tax codes are the most profitable for each cases). For the little I understand, neither task is technically easy, not to say a word of political will.
by Francois in Paris on Thu Apr 6th, 2006 at 11:36:46 AM EST
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