The Integrity of the Tax System after BEPS: A Shared Responsibility

Abstract

The international tax system is the result of the interaction of different actors who share the responsibility for its integrity. States and multinational corporations both enjoy to a certain extent freedom of choice with regard to their tax behaviour -which entails moral responsibility. Making, interpreting and using tax rules therefore is inevitably a matter of exercising responsibility. Both should abstain from viewing tax laws as a bunch of technical rules to be used as a tool without any intrinsic moral or legal value. States bear primary responsibility for the integrity of the international tax system. They should become more reticent in their use of tax as regulatory instrument -competing with one another for multinationals' investment. They should also act more responsibly by cooperating to make better rules to prevent aggressive tax planning, which entails a shift in tax payments from very expert taxpayers to other taxpayers. Here, the distributive justice of the tax system and a level playing field should be guaranteed. Multinationals should abstain from putting pressure on states and lobbying for favourable tax rules that disproportionally affect other taxpayers -SMEs and individual taxpayers alike. Multinationals and their tax advisers should avoid irresponsible conduct by not aiming to pay a minimalist amount of (corporate income) taxes -merely staying within the boundaries of the letter of the law. Especially CSR-corporations should assume the responsibility for the integrity of the tax system.

Determinants of Sustainable Open Innovations—A Firm-Level Capacity Analysis

“…According to [44][45][46], the tax system indicator and tax administration were used to express institutional quality. On the one hand, a tax system not only provides the necessary resources to build high-quality institutions, but also enables the consolidation of a social contract that gives rise to a more demanding relationship between the state and its citizens [47,48]. Therefore, taxes represent a crucial variable that affects the institution's capacity to promote efficient equilibria that achieve the maximum social returns permitted by the technological frontier and the legitimacy of institutions.…”

Good Tax Governance: A Matter of Moral Responsibility and Transparency

“…States engaging in tax competition indeed bear responsibility for the lack of coordination of tax systems -although tax policy appears to respond primarily to those, such as MNCs with the resources to influence the policymakers (Christians 2017), this often amounts to "the substantive tax law shamelessness that marks much corporate tax lobbying" (Kleinbard 2013(Kleinbard , 1517. Unfortunately, however, the notion of sharedbe it asymmetric -responsibility is not dealt with (Gribnau 2017b). It is not as if there are tax planning opportunities and therefore choices to be made that one is at liberty to do whatever one pleases.…”

Morality of Lobbying for Tax Benefits: A Kantian Perspective

“…Indeed, literature suggests that multinationals, if necessary through their advisors, exert substantial influence on tax legislation. Gribnau et al have observed that multinationals are very effective at lobbying for beneficial tax reliefs (Gribnau, 2017;. Vet et al have noted the dominant presence of multinationals and their advisors during the OECD discussions on the reform of the international tax system, and show how they seem to use their political power to push the discussion into a direction that leaves room for tax planning (Vet et al, 2021).…”