Ethics of Corporate Taxation: A Systematic Literature Review

Abstract

In recent times, corporations have been scrutinized for their tax behavior. Various groups of stakeholders have expressed their concern over certain corporate tax strategies that allow multinationals to pay ridiculous amounts of tax in the countries where they operate. Although national governments and international institutions are developing initiatives to reform tax rules to ensure that companies pay their fair share of tax, the international tax framework still offers MNEs several opportunities for minimizing their tax burden. In order to help businesses self-regulate their behavior in those “gray areas” where the tax law is imperfect and to drive changes in legislation, corporate taxation has recently been included in the business ethics field. In other words, the ethical responsibilities associated with corporate taxation have started to be investigated and companies are increasingly expected to exhibit a morally responsible approach to tax planning, above and beyond compliance with the letter of the law. The purpose of this chapter is to present a systematic review of literature dealing with the ethical issues associated with corporate taxation. A better understanding of the evolution, the scope and the state of the art of this academic debate is provided by the literature review. Three main topics will be critically discussed: the ethics of tax evasion, the ethics of tax avoidance and the ethics of tax practitioners. Finally, suggestions and future research paths will be offered, in order to encourage studies to foster the debate on the ethics of corporate taxation.