Restoring stakeholders’ trust in multinationals’ tax planning practices with corporate social responsibility (CSR)

Ave-Geidi Jallai

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

Abstract

This contribution discusses the tax planning behaviour of big corporations and investigates Corporate Social Responsibility (CSR) as a tool to battle the issue. It will be argued that certain legal tax planning strategies of multinationals are not acceptable to local communities and the public in general. If this unacceptability line is crossed, stakeholders might lose trust in a company. This, in turn, can cause reputation damage and various related costs for multinationals. Therefore, multinationals should, as it will be argued, think about possibilities for (re-)building stakeholder trust in a company.
The author explains that trust is based on a belief that a company makes solid moral decisions that do not harm the other party. Therefore, companies should make solid moral decisions that do not harm stakeholders also when it comes to their tax planning strategies. But how to do that? It will be suggested that they look at CSR for help. As will be argued, with CSR corporations can prove that their decision-making considers in addition to economic and legal values also society and its moral values as a whole. For applying CSR in tax planning practices, both procedural and substantive elements will be proposed. From the procedural perspective, companies should be more transparent about their strategies, and from the substantive side, good tax governance should take into account ethical considerations. Thus, ethically sound decision-making reflects the behaviour of a trustworthy company and should, therefore, help to reinforce stakeholders’ trust.
Original languageEnglish
Title of host publicationBuilding trust in taxation
EditorsBruno Peeters, Hans Gribnau, Jo Badisco
PublisherIntersentia
Pages173-201
Number of pages29
ISBN (Print)9781780684260
Publication statusPublished - 2017

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Tax planning
Stakeholders
Multinationals
Corporate Social Responsibility
Decision making
Moral values
Governance
Tax
Damage
Economics
Local communities
Costs

Cite this

Jallai, A-G. (2017). Restoring stakeholders’ trust in multinationals’ tax planning practices with corporate social responsibility (CSR). In B. Peeters, H. Gribnau, & J. Badisco (Eds.), Building trust in taxation (pp. 173-201). Intersentia.
Jallai, Ave-Geidi. / Restoring stakeholders’ trust in multinationals’ tax planning practices with corporate social responsibility (CSR). Building trust in taxation. editor / Bruno Peeters ; Hans Gribnau ; Jo Badisco. Intersentia, 2017. pp. 173-201
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Jallai, A-G 2017, Restoring stakeholders’ trust in multinationals’ tax planning practices with corporate social responsibility (CSR). in B Peeters, H Gribnau & J Badisco (eds), Building trust in taxation. Intersentia, pp. 173-201.

Restoring stakeholders’ trust in multinationals’ tax planning practices with corporate social responsibility (CSR). / Jallai, Ave-Geidi.

Building trust in taxation. ed. / Bruno Peeters; Hans Gribnau; Jo Badisco. Intersentia, 2017. p. 173-201.

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

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Jallai A-G. Restoring stakeholders’ trust in multinationals’ tax planning practices with corporate social responsibility (CSR). In Peeters B, Gribnau H, Badisco J, editors, Building trust in taxation. Intersentia. 2017. p. 173-201