The Relationship between Corporate Social Responsibility and International Tax Avoidance

Abstract

This paper aims to illustrate Corporate Social Responsibility (CSR) dilemmas that multinationals face when taking international tax planning decisions. The paper, written as a chapter in a CSR-handbook for business lawyers, first provides an overview of the context in which cross-border tax issues and dilemmas arise, and identifies the relevant stakeholders and actors. The authors do not take a stance in the discussion on whether or not CSR should play a role when a multinational determines its international tax planning policy, but taking as a starting point a hypothetical multinational that wants to take CSR considerations into account, they illustrate the tax planning dilemma’s that may arise. They provide a list of factors that may be taken into account by a multinational in determining whether an international tax planning scheme is acceptable from a CSR point of view. To illustrate the relevance of their observations, the authors finish the discussion by considering three of the debate’s high-profile cases.

Keywords: corporate social responsibility, international tax planning, tax avoidance, business ethics, tax morality, CSR