Mr. Seamus Coffey:

Absolutely. One of the issues here is that some of the laws and processes involved in taxing companies simply have not kept pace with the way companies have changed. Transfer pricing emerged in the 1920s and 1930s. The principles of residence have developed from case law and moved on to reflect incorporation. The companies and their advisers are looking for gaps that they can fall through. The BEPS project of aligning profit with substance will close an awful lot of those. However, a problem will remain with US companies. They will be able to attribute a large part of their non-US profit - their sales to non-US customers, whose location should not determine where tax is owing, as opposed to their non-US activities - to licence holders or companies that have intellectual property. Those are companies that do not need substance. Everybody else is trying to align profit with substance, and the US is not moving. That is creating some of these problems.