Theoretical Perspectives on Ethical Dilemmas in Globalization and International Taxation

Abstract

Global corporations confront ethical dilemmas that lead to increasingly contentious environments where corporations extend tax planning by availing of ambiguities and new devices such as tax havens emerging from a globalized economic system. Adopting a normative theory-based approach, the paper contextualizes global tax planning approaches applying three theoretical perspectives, agency, legitimacy and normative stakeholder that help interpret ethical issues in global taxation to reflect the tensions and viewpoints of interest groups. The paper thereby extends the classifications of tax planning beyond those that emerge through the stages of historic growth of tax departments as profit centers and risk management centers (e.g., Donohoe, McGill, & Outslay, 2014) to stakeholder accountability centers. Specifically, drawing attention to the multiple stakeholders impacted by global business and international taxation, the paper presents a rationale for public policy that engages global business to further the public interest through a stakeholder based tax planning approach.

Keywords: International Taxation, Ethical Dilemmas, Theoretical Perspectives, Corporate Tax Planning

JEL Classification: H2, K34, M14