How is anyone supposed to arrange their affairs if the law they're going to be subjected to isn't established until after the fact?
Notice that we almost never hear about corporations avoiding payroll taxes or VAT. They avoid this kind of tax in particular because the rules are unusually squishy and incoherent, and every time they find another way to do it, governments respond by making it more complicated or even less coherent instead of addressing the root cause and replacing it with something clearer and simpler.
There are other reasons corporations prefer workers to be contractors, but that isn't it.
Contractors paid themselves a minimum salary to avoid the payroll taxes. They then took the rest of their earnings as dividends from their personal services company instead, the combination of payroll taxes + income taxes being higher than taxes on dividends.
Since that ruse has been heavily restricted, employers have had to increase contractor pay to make-up for contractors having to pay more income tax + national insurance.
OK, it's unfortunately 175 pages long [0] instead of seven words, but that really is the gist of it. The current legislation is a more "squishy and incoherent" set of rules [1] that say you cannot give "state aid" preferentially to any company, the technicalities of which are being litigated in the ongoing Apple case.
[0] https://data.consilium.europa.eu/doc/document/ST-8778-2022-I... [1] https://competition-policy.ec.europa.eu/state-aid/overview_e...
What they're kind of implying is that they want multinational corporations to pay more than they receive so some other people can receive more than they pay, but they haven't actually specified who or by how much. It would be pretty silly and inefficient to deny large companies the use of government-operated transit systems or police protection, but to make it at all practical you end up creating enough exceptions that anyone can find a loophole.
I feel like the elephant in the room is this. A lot of these huge companies are monopolies or nearly so, and a large proportion of their profit is a monopoly rent. But a monopoly rent isn't attributable to a particular factory or the location of your software developers. It can't be attributed to something happening in any particular jurisdiction because it's actually attributable to something that shouldn't be happening at all, and which doesn't have any corporeal existence or physical location. So those profits naturally get declared in whichever jurisdiction has the lowest taxes.
But the problem is not that the monopoly rent is being taxed in the wrong jurisdiction or at the wrong tax rate, the problem is that the monopoly rent exists. Stop trying to pin it to a particular place and find a way to eliminate it.