Ethical standards for tax planning by corporations

Abstract

This chapter focuses on corporate tax planning in the context of business ethics and corporate social responsibility (CSR). Should corporations integrate tax planning into their CSR policy? If so, how? Tax planning in the context of CSR is conceptualized in this chapter as good tax governance. Good tax governance goes further than pure compliance with the (letter of the) law because taxation has a moral dimension. Derived from that, good tax governance is presented as a counterpart for aggressive tax planning or tax avoidance. The increased public attention to corporate tax planning practices and the moral dimension of taxation are indicative of the need for corporations to engage in good tax governance if they claim to behave socially responsible. Ethical decision-making in the context of tax planning requires corporations to develop a tax code of conduct and adhere to standards of transparency. This chapter aims to show why and how tax planning can be integrated into CSR.