Taxation, General Anti-Avoidance Rules and Corporate Social Responsibility

25 Pages Posted: 18 Mar 2019 Last revised: 22 Mar 2019

See all articles by Peter Koerver Schmidt

Peter Koerver Schmidt

Copenhagen Business School - CBS Law

Karin Buhmann

Copenhagen Business School (CBS) - CBS Centre for CSR; Dpt of Management, Society and Communication

Date Written: March 5, 2019

Abstract

As a result of the OECD/G20 project on base erosion profit shifting as well as the adoption of the EU anti-tax avoidance directive, many countries have recently introduced or strengthened general anti-avoidance rules (GAARs) in their tax treaties and domestic tax legislations. Arguably, such general anti-avoidance rules are turning the responsibility to obey the spirit of the law from a CSR expectation into a legal obligation. Against this background, it is discussed whether CSR can or should (still) play an important role with respect to measuring and guiding MNEs’ tax planning behaviour. It is concluded that the widespread use of GAARs cannot be expected to eliminate or significantly reduce the need for CSR considerations and guidance – at least not in the foreseeable future, inter alia because these provisions bring along significant interpretive uncertainty and cannot be expected to prevent all tax planning that compromises the spirit of the tax legislation. Accordingly, instead of downplaying the role of CSR and responsible business conduct, it is suggested to update the chapter on taxation in the OECD Guidelines for Multinational Enterprises in order to provide better and more detailed guidance on how MNEs should strike a proper balance between tax planning and CSR.

Keywords: Taxation, aggressive tax planning, general anti-avoidance rules, corporate social responsibility

Suggested Citation

Koerver Schmidt, Peter and Buhmann, Karin, Taxation, General Anti-Avoidance Rules and Corporate Social Responsibility (March 5, 2019). Copenhagen Business School, CBS LAW Research Paper No. 19-15. Available at SSRN: https://ssrn.com/abstract=3347108 or http://dx.doi.org/10.2139/ssrn.3347108

Peter Koerver Schmidt (Contact Author)

Copenhagen Business School - CBS Law ( email )

Porcelaenshaven 18B, 1 floor
Frederiksberg 2000
Denmark

Karin Buhmann

Copenhagen Business School (CBS) - CBS Centre for CSR; Dpt of Management, Society and Communication ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

HOME PAGE: http://www.cbs.dk/en/research/departments-and-centres/department-of-intercultural-communication-and-

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