The way it works is, in the USA they tell them they earn this much, in jurisdiction B they tell them they earn that much. Jurisdiction B says "Oh well the major

The way it works is, in the USA they tell them they earn this much, in jurisdiction B they tell them they earn that much. Jurisdiction B says "Oh well the majority, Y% of your value is created in the USA so we won't tax you on Y%". So jurisdiction B forgoes that Y% tax, and then the USA doesn't tax it either, and that then goes onto the bottom line! Now, you could say, that's Jurisdiction B's business, but it doesn't undermine the fact that they save a huge amount of tax off their profits courtesy of Jurisdiction B, and this has a highly significant effect on their earnings. What gets really interesting is if Jurisdiction B is part of a larger "Bloc E". They can effectively do business in Bloc E at a highly discounted rate relative to competitors, and even native businesses, and other members of Bloc E start to complain. Who loses out here? Everybody but the tax efficient "Company A" and a bunch of insiders in Jurisdiction B.