However, the beneficiaries of this development are mainly European countries with low tax rates, which does not include Germany. These countries now attract real investments from multinational firms.
Since the OECD has started working on avoiding aggressive tax planning by multinational firms as part of the Base Erosion and Profit Shifting Project (BEPS), higher tax transparency has repeatedly been a topic on the political agenda. In 2016, the European Commission eventually agreed to the OECD proposals to achieve more transparency by introducing a mandatory country-specific report for multinational firms with the EU directive 2016/881. It applies to companies with a consolidated annual turnover of at least 750 million euros that have either their headquarters or a subsidiary in the EU. Since 2016, CbCR requires these companies to submit a separate report to the respective national tax offices in which they break down their overall activity (e.g. subsidiaries, employees, profits, tax payments) in each country. This increases tax transparency, which in turn should curb aggressive tax planning and enable international tax offices to better look into transfer pricing strategies.
The ZEW policy brief (English) can be downloaded here: http://ftp.zew.de/pub/zew-docs/policybrief/en/pb05-19.pdf