Getting too good: Towards Responsible Corporate Tax Behaviour is a new discussion paper written by ActionAid, Christian Aid and Oxfam that seeks to advance the debate about ‘what good looks like’ when assessing the tax behaviour of multinational companies (MNCs). It does so by examining the different (while often overlapping) elements of MNC tax responsibility, and by making recommendations for measurable and progressive improvement.
Part 1 starts by describing the significance of corporate taxation for sustainable development. It also explains why companies should care about being responsible in their tax behaviour, both from a risk management perspective and taking into account the impact of corporate tax behaviour on human rights and sustainable development. Part 2 puts forward an overarching recommendation or ‘proposition’ for tax-responsible behaviour across eight areas of corporate tax responsibility (Tax planning practices, Public transparency and reporting, Non-public disclosure, Relationships with tax authorities, Tax function management and governance, Impact evaluation of tax policy and practice, Tax lobbying/advocacy and Tax incentives)
ActionAid, Christian Aid and Oxfam seek to advance the debate by focusing on ‘what good looks like’ within key issue areas of corporate tax behavior instead of focusing the debate on what companies should avoid doing in order to be responsible. The discussion paper seek to dispel myths on both extremes of the spectrum: the argument, on one end of the spectrum, that mere compliance with the law is enough to be ‘tax responsible’, and, on the other end, that the way forward for companies wanting to be responsible on tax is clearly marked and paved. Tax-responsibility is more than the amount of tax paid at year end, and by no means a clearcut state of grace which companies can attain short-term. Nor is it a one-size-fits-all for all companies across industries. However, there are multiple concrete steps companies can take today that will put them on a path to tax-responsibility.
You can download the document here.