How Starbucks Lost its Social License — And Paid £20 Million to Get it Back

4 Pages Posted: 13 Aug 2013  

Allison Christians

McGill University - Faculty of Law

Date Written: August 12, 2013

Abstract

It is well accepted that corporations require various legal licenses to do business in a state. But Starbucks’ recent promise to pay more tax to the UK regardless of its legal obligation to do so confirms that businesses also need what corporate social responsibility experts call a "social license to operate". Companies may now in effect be required to pay some indeterminable amount of tax in order to safeguard public approval of their ongoing operations. This suggests that even as the OECD moves forward on a project to salvage the international tax system from its tattered, century-old remains, the tax standards articulated by governments will no longer be enough to guarantee safe passage for multinationals. Instead, companies may have to deal with a much more volatile, and fickle, tax policy regime: one developed on the fly by public opinion.

Keywords: taxation, tax policy, CSR, social license, accountability, governance, legal pluralism, soft law

JEL Classification: E62, H25, K34, M14, D78, G38

Suggested Citation

Christians, Allison, How Starbucks Lost its Social License — And Paid £20 Million to Get it Back (August 12, 2013). Tax Notes International, Vol. 71, No. 7, 2013. Available at SSRN: https://ssrn.com/abstract=2308921

Allison Christians (Contact Author)

McGill University - Faculty of Law ( email )

1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5
Canada

Paper statistics

Downloads
413
Rank
56,478
Abstract Views
1,488