> "Now they could go and set up somewhere there really is no tax to be paid ..."

This is pretty much what they do, with legal entities in different jurisdictions. Then they can move money around such that the 'profit' is always made in a low-tax environment. For example, I always found it amusing that the invoices for my Amazon purchases had anything to do with Luxembourg (a country with <600k people), until I learned more about how tax havens work. Especially, about the process of 'capturing the state'.

If anyone would like to read more about Tax Havens (aka Secrecy Jurisdictions) I thoroughly recommend the book Treasure Islands by Nicholas Shaxson [1]. (Disclosure: that's an affiliate link for my college's library).

[1] http://www.amazon.co.uk/Treasure-Islands-Havens-Stole-World/...

Anyone interested in learning more about how tax avoidance and havens work as well as large company 'best-practices' might be interested in reading Treasure Islands by Nicholas Shaxson.

Book site: http://treasureislands.org

Amazon: http://www.amazon.co.uk/Treasure-Islands-Havens-Stole-World/...

Disclaimer: There's a referral code in the Amazon link for my college's library