The Social Irresponsibility of Corporate Tax Avoidance: Taking CSR to the bottom line

Christensen, John; Murphy, Richard

doi:10.1057/palgrave.development.1100066

Cited by 239 publications

(163 citation statements)

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“…Organised and aggressive tax avoidance raises major questions about the assumed social responsibility and ethics of accountancy firms and their rich clients, but such issues attract little attention in the bourgeoning corporate social responsibility and accounting literature (Christensen and Murphy, 2004) even though some of the episodes are regularly reported in newspapers (Bougen et al, 1999;Mitchell et al, 2002 whilst for the same period, despite record company profits and average rates of return of 11.5% against an annual inflation rate of 3-4%, the take from corporate taxes increased from £21.5 billion to only £28.1 billion 32 . Corporate share of total UK tax take has dropped from 11.5 per cent in 1997/98 to 7.7 per cent in (BDO Stoy Hayward, 2004) and amounts to less than 2.5% of the British GDP, the lowest ever (Mitchell and Sikka, 2005 Sociological literature draws attention to a close (but complex) relationship between the state and accountancy profession (Johnson, 1972(Johnson, , 1980 which enables the state to manage and displace its crisis of legitimacy ( Sikka and Willmott, 1995b).…”

Section: Discussion and Summarymentioning

confidence: 99%

The role of accountancy firms in tax avoidance: Some evidence and issues

2005

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As entrepreneurial businesses, accountancy firms have supplemented their traditional trade of selling accounting and auditing services by diversifying into a variety of other products and services. They have developed organisational struc tures and strategies to sell tax avoidance schemes to corporations and wealthy individuals. The sale of such services shifts tax burdens to less mobile capital and less well-off citizens. It also erodes the tax base and brings the firms into direct conflict with the state. This paper provides some evidence of the strategies and tactics used by accountancy firms to sell schemes that enable their clients to avoid corporate, sales and payroll taxes. Such strategies stimulate reflections upon the possible trajectories in the development of accountancy firms and social consequences of their trade.

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Section: Discussion and Summarymentioning

confidence: 99%

The role of accountancy firms in tax avoidance: Some evidence and issues

2005

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“…In recent years increasing academic attention has been devoted to what is being termed political CSR (Scherer & Palazzo, 2011), with critical works also addressing subjects like: the limits of CSR as self-regulation (Banerjee, 2008); corporate social accountability (Sethi, 2008); and corporate political lobbying and tax avoidance (Christensen and Murphy, 2004). A further frequent criticism of CSR is that it often focuses on the micro-level e.g.…”

Section: Csr Politics and Mining Governancementioning

confidence: 99%

Corporate social responsibility, mining and sustainable development in Namibia: Critical reflections through a relational lens

Littlewood

2014

Development Southern Africa

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“…The bourgeoning corporate social responsibility literature is largely silent on the role of transfer pricing in tax avoidance and the flight of capital (Christensen and Murphy, 2004). A considerable body of literature draws attention to the economic theories underlying transfer pricing (e.g.…”

Section: Introductionmentioning

confidence: 99%

The dark side of transfer pricing: Its role in tax avoidance and wealth retentiveness

Sikka

Willmott

2010

Critical Perspectives on Accounting

232

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In conventional accounting literature, ‗transfer pricing' is portrayed as a technique for optimal allocation of costs and revenues amongst divisions, subsidiaries and joint ventures within a group of related entities. Such representations of transfer pricing simultaneously acknowledge and occlude how it is deeply implicated in processes of wealth retentiveness that enable companies to avoid taxes and facilitate the flight of capital. A purely technical conception of transfer pricing calculations abstracts them from the politico-economic contexts of their development and use. The context is the modern corporation in an era of globalized trade and its relationship to state tax authorities, shareholders and other possible stakeholders. Transfer pricing practices are responsive to opportunities for determining values in ways that are consequential for enhancing private gains, and thereby contributing to relative social impoverishment, by avoiding the payment of public taxes. Evidence is provided by examining some of the transfer prices practices used by corporations to avoid taxes in developing and developed economies. Institution has argued that -transfer pricing is used by virtually every multinational corporation to shift profits at will around the globe‖ (Baker, 2005, p. 30). KeywordsThe mobilization of transfer pricing for tax avoidance 2 , and sometimes evasion, is largely invisible to the public and is difficult and expensive for regulatory authorities to detect. There is indeed a complex game involving numerous actors -corporations, accountants, lawyers, consultants, governments, tax authorities, multinational agencies (e.g. OECD), NGOs and so on -engaged in establishing and revising the rules of the game with regard to which method(s) of calculating prices is acceptable, and also developing and detecting ways of manipulating, escaping or subverting these rules and methods. As means of enhancing divisional, segmental, product and global profits, the unimpeded use of transfer pricing matters to stock markets as earnings, dividends, share prices and return on capital are all affected. It also matters to company executives because their financial rewards are frequently linked to corporate earnings. Transfer pricing practices matter to the state because they affect the taxes 4 that it can levy upon corporate profits to finance public goods and thereby secure legitimacy.Business advisers claim that -transfer pricing continues to be, and will remain, the most important international tax issue facing MNEs‖ (Ernst & Young, 2006, p. 5 Transfer pricing is a well-established topic in accounting textbooks, but the use of transfer pricing 4 to avoid taxes and shift capital has attracted little sustained interest (Sikka et al., 2007). The bourgeoning corporate social responsibility literature is largely silent on the role of transfer pricing in tax avoidance and the flight of capital (Christensen and Murphy, 2004). A considerable body of literature draws attention to the economic theories underlying transfer pric...

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The Social Irresponsibility of Corporate Tax Avoidance: Taking CSR to the bottom line

Cited by 239 publications

References 3 publications

The role of accountancy firms in tax avoidance: Some evidence and issues

The role of accountancy firms in tax avoidance: Some evidence and issues

Corporate social responsibility, mining and sustainable development in Namibia: Critical reflections through a relational lens

The dark side of transfer pricing: Its role in tax avoidance and wealth retentiveness

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