If for example, an MNC gets revenue from a client who is a citizen of a particular country, does that mean the MNC have to pay tax on that share of income to that particular country? Or can an MNC pick and choose which country they have operations in to pay taxes to?
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In reality, this is a very complicated and difficult subject to go through in any detail. Many highly paid tax lawyers, accountants and consultants are paid large sums of money to structure taxes for large corporations. Tax laws, corporate law, international tax agreements all come into play on a country by country basis.
In theory, a company has to pay income taxes in every country it operates in. ELI5, if it sells a product in country A, then it owes taxes on the profits of that sales to country A. Very broadly, in order to sell product in a country, most countries require that there be some form of domestic corporation (like a subsidiary) established in that country and therefore taxes will be incurred in that country. The alternative is for the company to work with a local importer and distributor and essentially not officially sell their product in-country. In that case, the importer/distributor will be paying income taxes on their profits.
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