make a comment aboutthe student thought:There are three main channels for MNCs to shift profits to Tax Havens and avoid corporate tax in the U$.$S which imposes $21\%$ tax rate on corporates.

Debt shifting: When the parent company lends money from the subsidiaries located in a Tax Haven country and pays interest on loas as well, which is considered tax$-$deductible. By that profit is reduced from parent company and added to the offshore location.

Registering intangible assets: When parent company transfers intangible assets such as trademarks and copyright to offshore company, and still make parent company pay royalties to off shore company for using the assets. which lower profits of parent company and add to offshore location profits.

Strategic transfer pricing: when parent company trades with its offshore company, the trade pricing is usually is set as $$arm$$s length principal$$ which means prices are set as the offshoring company is selling to a non$-$associated company. Which in reality adds to profit at the offshore location and lowers profit at parent company location.

Overall these strategies are set to increase profit at location where imposed corporate tax is less and reduce profit at parent company location.