This represents, on average, some 23 per cent of total corporate contributions and 10 per cent of total government revenues, according to UNCTAD's recent World Investment Report 2015.

The Report says: "The relative size (and composition) of this contribution varies by country and region. It is higher in developing countries than in developed countries, underlining the exposure and dependence of developing countries on corporate contributions. (On average, the government budgets of African countries depend on foreign corporate payments for 14 per cent of their funding.)"

It adds: "the lower a country is on the development ladder, the greater is its dependence on non-tax revenue streams contributed by firms."

In developing countries, MNEs' subsidiaries & JVs, on average, contribute more than twice as much to government revenues through royalties on natural resources, tariffs, payroll taxes and social contributions, and other types of taxes and levies, than through corporate income taxes.

MNEs build their corporate structures through cross-border investment. They do so in the most tax-efficient manner possible, within the constraints of their business and operational needs. The size and direction of FDI flows are often influenced by MNE tax considerations, because the structure and modality of investments enable opportunities to avoid tax on subsequent investment income.

As put by the Report, "An investment perspective on tax avoidance puts the spotlight on the role of offshore investment hubs (tax havens and special purpose entities in other countries) as major players in global investment. Some 30 per cent of cross-border corporate investment stocks have been routed through offshore hubs before reaching their destination as productive assets. (UNCTAD's FDI database removes the associated double-counting effect.)"

The outsized role of offshore investment hubs in global corporate investments is largely due to tax planning, although other factors can play a supporting role. MNEs employ a range of tax avoidance levers, enabled by tax rate differentials between jurisdictions, legislative mismatches, and tax treaties.

The Report explains: MNE tax planning involves complex multilayered corporate structures. Two archetypal categories stand out: (i) intangibles-based transfer pricing schemes and (ii) financing schemes. Both schemes, which are representative of a relevant part of tax avoidance practices, make use of investment structures involving entities in offshore investment hubs - financing schemes especially rely on direct investment links through hubs.

The Report notes: "Tax avoidance practices by MNEs are a global issue relevant to all countries: the exposure to investments from offshore hubs is broadly similar for developing and developed countries. However, profit shifting out of developing countries can have a significant negative impact on their prospects for sustainable development. Developing countries are often less equipped to deal with highly complex tax avoidance practices because of resource constraints or lack of technical expertise."