The International Order of Corporate Taxation: From Market-Building to Sustainable Fiscal Settlement?

In Beate Sjåfjell and Christopher M. Bruner (eds), Cambridge Handbook of Corporate Law, Corporate Governance and Sustainability (Cambridge University Press, Forthcoming).

University of Oslo Faculty of Law Research Paper No. 2019-14

Posted: 8 May 2019 Last revised: 16 May 2019

See all articles by Jussi Jaakkola

Jussi Jaakkola

University of Turku, Faculty of Law

Reijo J Knuutinen

University of Turku - Turku School of Economics

Date Written: May 6, 2019

Abstract

This chapter outlines the historical development of international governance of corporate taxation. It analyses whether intergovernmental cooperation has invigorated or countervailed the adverse consequences of economic globalisation. In essence, it explores whether international tax governance has endeavoured to constrain or safeguard states’ capacities to tax. On the one hand, the chapter examines how international co-operation started with efforts to eliminate double tax burdens and was motivated by the aspiration of constructing a transnational market order. On the other, it depicts how later phases of international tax governance have been sparked by the need to contain harmful tax competition and international tax avoidance, which have been experienced as undesired outcomes of untrammelled globalisation. The chapter concludes that although corporate taxation has increasingly become an issue of international governance, corporate tax base design and tax rate setting have substantially remained beyond international constraints, leaving room for tax competition and tax avoidance.

Keywords: tax competition, international tax avoidance, international tax governance, tax sovereignty, aggressive tax planning

Suggested Citation

Jaakkola, Jussi and Knuutinen, Reijo J, The International Order of Corporate Taxation: From Market-Building to Sustainable Fiscal Settlement? (May 6, 2019). In Beate Sjåfjell and Christopher M. Bruner (eds), Cambridge Handbook of Corporate Law, Corporate Governance and Sustainability (Cambridge University Press, Forthcoming).; University of Oslo Faculty of Law Research Paper No. 2019-14. Available at SSRN: https://ssrn.com/abstract=3383421

Jussi Jaakkola (Contact Author)

University of Turku, Faculty of Law ( email )

Turku, FI-20014
Finland

Reijo J Knuutinen

University of Turku - Turku School of Economics ( email )

Rehtorinpellonkatu 3
TURKU, FI-20500
Finland

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