We live in austere times, and yet the budget this week will be a bonanza for big business. For all the chancellor's rhetoric about clamping down on tax dodging as a quid pro quo for abandoning the 50p tax rate, some of the biggest handouts will be in tax cuts and tax-avoidance-made-simple for multinationals. But this is no surprise, given that the multinationals themselves have been closely involved in rewriting the tax rules.

The budget will usher in major changes to the way UK-based multinationals are taxed on profits from their overseas subsidiaries, as well as huge cuts in corporation tax. Over the lifetime of this parliament, about £20bn will be lost in tax receipts as a result, according to the Treasury's own estimates.

By the time George Osborne's cuts to corporation tax – from 28% when the coalition took power, to 23% by 2015 – have been phased in, they will have resulted in losses of more than £5bn a year to the revenue. A further cut – to just 20% – was floated this month.

In addition to these losses in revenue, the exchequer will be deprived of close to £1bn a year by 2015 in taxes on foreign subsidiaries. The tax changes involved – to the controlled foreign companies rules – are so complex and arcane, much of the proposed cuts to taxing offshore profits have slipped in under the radar.

The Treasury argues the reforms are necessary to stimulate growth and to make our corporate tax system "more competitive". But this is a race to the bottom. The changes will encourage multinationals to shift more of their business to tax havens. There is no benefit to small- and medium-sized British companies. The reforms represent a triumph of corporate regulatory capture, begun under the last Labour government and accelerated under this one.

The technical bits are as follows: under old controlled foreign companies rules, if a British company (currently liable for a corporate tax rate of 26%) has subsidiaries overseas – in Ghana, say (tax rate 25%) and Switzerland (tax rate 8%) – and it chooses to shift profits out of the territories with the higher tax rates to the lowest tax haven rate, the UK would tax its profits on the difference between what it pays in Switzerland and the UK rate. This avoids companies being taxed twice on their profits, but also acts as a disincentive to shifting to tax havens, since it would end up paying much the same as if it left the profits in Africa.

The budget will bring in new exemptions, so that the CFC rules only apply if the tax haven subsidiary can be shown to have most of its dealings with the UK. So under the new rules, if a company transfers ownership of its brands from Ghana to Switzerland, its profits on those brands won't be subject to UK tax. It now has every incentive to shift its profits to the tax haven. The charity ActionAid estimates this could cost poorer countries £4bn a year in tax. Rubbish, says the Treasury, offering no impact assessment of its own.

The proposals, as former tax inspector and now Private Eye journalist Richard Brooks points out, will make the UK's arrangements more lenient than almost all other jurisdictions, in that only UK-generated income will be taxed in the UK while the costs of funding overseas operations remain allowable against UK profits for UK tax.

So far, so New Labour: these reforms began on its watch. But the new goodie given the go-ahead by Osborne is a further exemption which will reduce multinationals' tax bills dramatically: the exemption on profits of offshore finance company subsidiaries.

If a UK-based multinational sets up a treasury company in Switzerland and puts equity into it from the UK, which is then passed on in loans to its other subsidiaries to run its operations, with interest on the loans flowing back in profits to the tax haven. The tax rates on these profits will be a maximum of just one-quarter of the current UK rate.

These new policies have been written by multinationals. Labour established a series of working groups to consult on the CFC reform made up almost entirely of tax directors from businesses with large numbers of offshore subsidiaries.

The monetary assets working group, for example, consisted of Vodafone, Shell, Diageo, Tesco, G4S, International Power and BHP Billiton. The intellectual property group included Kraft, GlaxoSmithKline, Associated British Foods, Cable & Wireless, and the insurance working group had Aviva, RSA, XL Group, Prudential, Lloyds and AIG. The banking group came from banks including Barclays, which is famous for sophisticated tax avoidance.

Under the new coalition government, a senior manager in international corporate tax from accountants KPMG, Robert Edwards, was seconded to the Treasury for 20 months to see through developing the policy on CFC rules. His speciality at KPMG? Advising multinationals on tax-efficient cross-border financing and restructuring.

With stakeholders like this, it's no surprise that tax justice protesters have taken to direct action and occupation.