The article four and its evolution: the starbucks' case.

Taxes are often considered with the treatment of debt financing that is affected by interest payments as deductible expenses, the treatment of capital losses or gains and the valuation with Adjusted Present Value (tax shields). The first thing that needs to be done is a clear distinction between returns to debt and returns to equity: in the first case we have tax deductibility of interest payments; concerning the second case we have the treatment of foreign exchange gains and losses. Corporate income tax is designed as a tax on the returns to equity only. Equity returns are taxed in the host country, then may be taxed in the home country (possibly with different timing): the host government acts first and then the home government determines policies vis-à-vis with the host government. The Host government determines tax rates on corporate profits first and then sets withholding taxes that are taxes imposed on capital paid to the parent as they are taken out of the country. In the Home government the tax policies are more complicated because they establish policies relative to previously determined host country’s policies.