Corporate Tax Avoidance and Neutralization Techniques: A Case Study on the Panama Papers

Abstract

This study examines the accounts provided by the CEOs of the corporations involved in the so-called Panama Papers scandal in order to advance the criminological understandings of how corporations challenge the law and how they routinize crime. To address these questions, I rely on media reports produced by investigative journalists and published in Latin American newspapers, where nearly half of the world's stories surrounding this scandal were published. The results show that most corporations involved in tax avoidance situations deny any criminal involvement and/or injury to society. The results also suggest that CEOs challenge the law by adopting legal pragmatism, using innovative corporate tax practices, and creating (secret) business structures in selected locations (tax paradises). Corporate tax avoiders routinize their crime by responding to international legislation that promotes economic incentives to international investors. As a whole, they ignore any social responsibility in the countries from which their capital originates, as wealth accumulation, at a minimum cost, is their main interest.

“We Have Been Thrown Under the Bus”: Corporate Versus Individual Defense Mechanisms Against Transnational Corporate Bribery Charges

“…Most studies on the neutralizations applied by white-collar criminals differ from corporate accounts, since they have focused on individual rationalizations by corporate employees (neutralizing crimes against the corporation) in contrast to corporate accounts (which neutralize crimes by the corporations). Studies of corporate accounts include examples of different forms of neutralizations employed by corporations (Box, 1983, p. 54), corporate responses to allegations of wrongdoing in the automobile industry (Whyte, 2016), neutralizations employed by large international corporations involved in international crimes (Huisman, 2010; Schoultz & Flyghed, 2016), neutralizations used by the tobacco industry (Fooks et al, 2013), neutralizations made by corporations involved in tax avoidance (Evertsson, 2019), and corporate responses from oil companies in connection with disasters (Breeze, 2012; Mathiesen, 2004). In these studies, scholars have both applied the traditional techniques of neutralization to corporations and identified new techniques that specifically apply to the corporate context.…”