Multinational Tax Avoidance: Virtue Ethics and the Role of Accountants

West, Andrew

doi:10.1007/s10551-016-3428-8

Cited by 48 publications

(55 citation statements)

References 28 publications

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“…The authors characterize their utilitarian analyses as "broad-brush assessments of positive and negative effects" and concede that no endeavours "have been made to attribute numerical values to any of the costs and benefits but readers can make their own reasonable extrapolations to estimate present and future, known and unknown costs or benefits" . This underspecified method does not support the author's conclusions of unethical aggressive tax avoidance (West 2017). Furthermore, Table 2 in Payne and Raiborn (2015) shows that an interpersonal comparable measurement and aggregation of all the costs and benefits of aggressive tax avoidance relative to fair tax payment does not seem feasible.…”

Section: Utilitarian Evaluationmentioning

confidence: 85%

“…West (2017) correctly argues that many different terms are used to describe attempts to reduce tax payments including "tax avoidance, tax minimisation, tax evasion, tax fraud, tax planning, tax dodging, tax aggressiveness, tax sheltering, tax abuse, tax mitigation, and tax resistance." One the one side authors like West (2017) and Dowling (2015) use the term "tax avoidance" in a broad and comprehensive way as an umbrella term; on the other side, more distinctions are made. For example, Bird and Davis-Nozemack (2016) differentiate between tax minimization, tax avoidance, and tax evasion.…”

Section: Definitions Of Tax Avoidance Forms and Tax Evasionmentioning

confidence: 99%

“…If aggressive tax avoidance cannot be considered a universalised maxim, i.e., leading to a logical or practical contradiction of conception (CC, Denkwiderspruch) or will (CW, Wollenswiderspruch), then this behaviour is morally wrong. In the previous literature, Godar et al (2005), Prebble (2010, p. 726, 2018, p. 378 f.), Preuss (2013) and West (2017) apply the Kantian categorical imperative to the problem of aggressive tax avoidance. Godar et al (2005) apply the Kantian test only in a special case of tax avoidance, i.e., inversion, in which the headquarter of a company is incorporated in a tax haven without changing the real value creation process.…”

Section: Deontological Evaluationmentioning

confidence: 99%

“…Type S situations may only be sufficiently available for MNCs; however, that is not the critical point. West (2017) rightly emphasises that we can imagine without any logical contradiction a world in which all MNCs avoid taxes as much as possible; therefore, Preuss' (2013) argument is based on a misunderstanding of the Kantian maxim concept. Preuss (2013) also ignores the important difference between a logical and practical contradiction of conception or will.…”

Section: Deontological Evaluationmentioning

confidence: 99%

“…This question will be investigated hereinafter with the aid of a deontological Kantian approach. The explicitly Kantian deontological attempts at justification of the morality or immorality of aggressive tax avoidance in the literature to date (see for example Prebble 2010, p. 726, 2018, p. 378 f.;Preuss 2013;West 2017) are partially sketchy or inconclusive and can therefore be contested. 1 In a recent investigative article in the German magazine Der Spiegel about subsidiaries of German firms in the tax haven Malta, the authors explicitly ask "why the best-known German industrial giants and the most successful of German's mid-sized firms take part.…”

mentioning

confidence: 99%

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Aggressive Tax Avoidance by Managers of Multinational Companies as a Violation of Their Moral Duty to Obey the Law: A Kantian Rationale

Lenz

2018

J Bus Ethics

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Managers of multinational companies often favour an aggressive tax avoidance strategy that pushes the legal limits onto the advantage of shareholders and the disadvantage of the spirit of democratically legitimized tax laws. The public and media debate whether such aggressive behaviour is immoral. Aggressive tax avoidance is a subset of the aggressive legal interpretations potentially observable in all fields which places little weight on the will of a democratically legitimized legislation. A thorough ethical analysis based on the deontological approach of Kant demonstrates that aggressive tax avoidance as a special case of operating on the edge of legal boundaries is potentially immoral. Applying the Kantian "contradiction of conception or will" test shows that this maxim might not be conceived or willed as a general law of nature. If all natural or legal persons aggressively interpret laws on all subjects and in every imaginable situation, then central principles of the system of law we all rely upon would be severely compromised. Therefore, aggressive tax avoidance by managers of multinational companies may violate the managers' moral duty to obey not only the letter but also the intention or spirit of the law. The validity of the argumentation depends critically on the formulation and interpretation of the respective maxims and on assumptions about the legal system. Preserving central elements of Kantian philosophy, the article demonstrates the complexity of a philosophical argumentation which tries to justify the moral intuitions that underpin the common negative evaluation of aggressive legal strategies in business.

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Section: Utilitarian Evaluationmentioning

confidence: 85%