Tax avoidance within multinationals
Contents
1. Introduction………………………..….…………………………………………………2
2. Tax avoidance is not immoral………………………………………………………….2
3. Disapproving of the justifications of tax avoidance.…………………………………3
4. Other moral issues......………………………………………………………………….3
5. Conclusion.………………………………………………………………………………4
Reference list……………….……………………………………………………………….5
1. Introduction
In the currently highly-integrated world some businesses are successful and big enough to become multinational companies, thus, operate in different countries. Regardless of the country in which the company operates, its government needs money for increasing the well-being of the citizens and developing the country’s economy. One of a government’s sources of finance is taxes, which are compulsory, unrequited payments imposed on corporations and individuals in favor of the state, established by the government in order to finance its activities.(Investopidia, 2013) In spite of the fact that all businesses must pay taxes, some firms try to reduce their bills. This is called tax avoidance and in contrast to tax evasion these are absolutely legal ways of tax dodging (ibid). However, a former British chancellor Denis Healey argues that “The difference between avoidance and evasion is the thickness of a prison wall” (cited in The Economist, 2013). Therefore, tax avoidance is not only about legality but also about morality and some say that it is morally wrong to avoid taxes. On the other hand, it is argued that in business every one survives as they can and tax avoidance is one of the ways to stay in business, thus there is nothing amoral about it. Notwithstanding of the fact that tax avoidance is legal, companies should pay full taxes, especially global businesses as a country’s economy can suffer from such actions [tax avoidance]. This essay will support the idea that tax avoidance is immoral, nevertheless, another opinion will be taken into account and critically evaluated, and then
1. Introduction………………………..….…………………………………………………2
2. Tax avoidance is not immoral………………………………………………………….2
3. Disapproving of the justifications of tax avoidance.…………………………………3
4. Other moral issues......………………………………………………………………….3
5. Conclusion.………………………………………………………………………………4
Reference list……………….……………………………………………………………….5
1. Introduction
In the currently highly-integrated world some businesses are successful and big enough to become multinational companies, thus, operate in different countries. Regardless of the country in which the company operates, its government needs money for increasing the well-being of the citizens and developing the country’s economy. One of a government’s sources of finance is taxes, which are compulsory, unrequited payments imposed on corporations and individuals in favor of the state, established by the government in order to finance its activities.(Investopidia, 2013) In spite of the fact that all businesses must pay taxes, some firms try to reduce their bills. This is called tax avoidance and in contrast to tax evasion these are absolutely legal ways of tax dodging (ibid). However, a former British chancellor Denis Healey argues that “The difference between avoidance and evasion is the thickness of a prison wall” (cited in The Economist, 2013). Therefore, tax avoidance is not only about legality but also about morality and some say that it is morally wrong to avoid taxes. On the other hand, it is argued that in business every one survives as they can and tax avoidance is one of the ways to stay in business, thus there is nothing amoral about it. Notwithstanding of the fact that tax avoidance is legal, companies should pay full taxes, especially global businesses as a country’s economy can suffer from such actions [tax avoidance]. This essay will support the idea that tax avoidance is immoral, nevertheless, another opinion will be taken into account and critically evaluated, and then