>Really, the major OECD players need to get together and figure out a way to stop the tax loophole arbitrage.

It's really a domestic political problem. The source of the problem is that you're attempting to tax something called "profit" in the context of an international corporation. Profit means revenues minus costs. The problem then becomes obvious: The corporation's executives will strive to report more of the international operation's costs in the subsidiary in the higher tax jurisdiction, and to report more of its revenues in the lower tax jurisdiction.

So, you say, make them report things accurately. But what does that even mean? If a company produces a product for internal use in one country and exports it to another, what is the "accurate" price to be reported as revenue to one subsidiary and cost to another? Is it the price that the item would cost at retail, or the price that it would cost if purchased in volume, or the cost of the raw materials used to produce it, or what?

No matter which you choose, companies will arrange their affairs so that it benefits them. If the price is set at the actual cost of production then subsidiaries in high tax jurisdictions will be found selling everything they produce through subsidiaries in lower tax jurisdictions and eliminating all of their profits that way (minimize taxable revenues). If the transfer price is allowed to include a nontrivial amount of profit then subsidiaries in high tax jurisdictions will be found buying everything they use at a premium through their foreign sister companies in lower tax jurisdictions and eliminating all their profits that way (maximize deductions).

The problem is that the entire concept of allocating profits by jurisdiction in an international supply chain owned entirely by a single entity is just totally unworkable. The profit belongs to the entire supply chain; in arms length negotiations the allocation of profit to each component would be determined by negotiating skill. And no matter what value you place on a transaction, corporations can rearrange their affairs to take advantage of that valuation, and it will be profitable for them to do so even if it costs $95,000,000 to save $100,000,000 in taxes.

The solution is to stop trying to allocate profits and just tax something else. Which is why it's a domestic political problem: People don't want to hear that. They want to imagine that corporations can pay their taxes for them and, as if by magic, this will get everyone else out of having to pay for the government services they want provided.

It's totally possible to tax international corporations, but you can't do it by trying to tax corporate profits. If you want to tax a corporation that makes use of government services and your jurisdiction's people when it produces value, tax real property or labor. If you want to tax them when they make money selling to your population, tax sales. If you want to tax investors, tax investment income.

Corporations aren't humans. If you ever did manage to extract tax revenue based on corporate profits, it would inevitably come out of the pockets of one of those groups in any event. Taxes have to be paid by somebody.