Good Tax Governance: A Matter of Moral Responsibility and Transparency

Nordic Tax Journal 2017 Issue 1: 70-88

19 Pages Posted: 22 Aug 2017

See all articles by Hans Gribnau

Hans Gribnau

Tilburg Law School; Leiden University

Ave-Geidi Jallai

Tax Law Department, Tilburg Law School, Tilburg University

Date Written: May 12, 2017

Abstract

Multinational corporations’ tax practices are hotly debated nowadays. Multinationals are accused of not paying their fair share of taxes. Apparently, acting within the limits set by law is not sufficient to qualify as morally responsible behavior anymore.

This article offers ethical reflection on the current debate.The general public typically evaluates (aggressive) tax planning in moral terms rather than legal terms. Therefore, multinationals need to reflect on their tax planning strategy next to economic and legal terms also in ethical terms. This article addresses the relationship between society, morality and taxes. The concepts of tax planning, “aggressive tax planning”, “tax evasion” and “tax avoidance” are elaborated on to exemplify the difference between a purely legal and broader approach. In moral terms, aggressive tax planning may imply loss of integrity and trust which may entail certain costs for businesses, such as reputation damage. It will be argued that in order to improve corporate reputation and (moral) leadership, corporate social responsibility (CSR), endorsed by many corporations around the globe, is a helpful tool. Reflection on tax planning in the context of CSR – good tax governance – should foster a moral mind set and enhance accountability and transparency.

Keywords: multinationals, tax avoidance, aggressive tax planning, corporate moral agency, corporate social responsibility (CSR), Carroll’s CSR Pyramid, transparency, Starbucks

Suggested Citation

Gribnau, Hans and Jallai, Ave-Geidi, Good Tax Governance: A Matter of Moral Responsibility and Transparency (May 12, 2017). Nordic Tax Journal 2017 Issue 1: 70-88. Available at SSRN: https://ssrn.com/abstract=3021914

Hans Gribnau (Contact Author)

Tilburg Law School ( email )

Tilburg, 5000 LE
Netherlands

Leiden University ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands

Ave-Geidi Jallai

Tax Law Department, Tilburg Law School, Tilburg University ( email )

Tilburg, 5000 LE
Netherlands

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