Professional Competition in Global Tax Reform: Transparency in Global Wealth Chains

Abstract

Abstract:In the wake of the Great Recession, international corporate taxation has risen to the top of the global political agenda. With states seeking to shore up national fiscal systems, the OECD/G20 Base Erosion and Profit Shifting (BEPS) project has emerged as the key response in this regard. Among 15 action points, Action 13 on corporate tax transparency has been particularly prominent. By shaping the feasibility of corporate tax strategies and the information resources available to national tax authorities, the Action 13 policy recommendations will fundamentally reconfigure the context of corporate tax behaviour and global wealth chains, i.e. strategies and structures for wealth creation and protection in the global economy. How did these new critical rules come about? Unfortunately, little is known about the micro-level process, dynamics and actors of the BEPS project. This paper provides an original case study of the changing international tax system and the regulatory context of global wealth chains, based on an investigation of the professionals engaged in global tax reform. Drawing on observations, interviews and sequence analysis of professional careers, it studies the dynamics of the professional policy environment and identifies distinct career and knowledge trends. The paper shows that professional competition for prestige and knowledge played a central role in the complex, transnational policy process. Operating within a technical policy environment, far removed from high-level politics, professionals seeking to make their mark on new standards for corporate tax transparency mobilised expertise and network capital, shaping what could be discussed, the criteria for accepted arguments, and who was listened to in the policy process, thus critically affecting the final policy outcomes.

A half-century of resistance to corporate disclosure

“…In contrast, in a survey conducted by PwC at the beginning of 2014, of 1,344 CEOs surveyed from 68 countries, 59% were in favour of public reporting. A detailed analysis of the OECD discussion (Corlin Christensen, 2015) confirms that it was focused narrowly on people with technical expertise from the private sector and excluded other interests.…”

How legal scholars facilitate tax avoidance: Case study on the power of tax consultancy firms

“…High‐profile scandals such as Pandora Papers, Panama Papers, and LuxLeaks have generated interest toward tax avoidance and created political pressure to tackle this phenomenon (e.g., Dietsch & Rixen 2016; Eskelinen & Ylönen 2017). Scandals have also highlighted the role of tax‐avoidance‐related products designed by the Big 4 tax advisory companies 1 (Davies 2017), which also influence national policy processes (Christensen 2017; Prince 2012). As Sikka (2008, p. 399) argues, the Big 4 firms are often willing “to deploy the necessary financial and political resources to secure conditions conducive to a smooth accumulation of profits” in their countries of operation.…”

“…High-profile scandals such as Pandora Papers, Panama Papers, and LuxLeaks have generated interest toward tax avoidance and created political pressure to tackle this phenomenon (e.g., Dietsch & Rixen 2016;Eskelinen & Ylönen 2017). Scandals have also highlighted the role of tax-avoidance-related products designed by the Big 4 tax advisory companies 1 (Davies 2017), which also influence national policy processes (Christensen 2017;Prince 2012).…”