Responsible Tax in Multinational Enterprises: Why and How?

In the first part of the paper, it is argued that multinational enterprises (MNEs) may benefit from including considerations of corporate responsibility when determining their tax planning behavior. The conclusion mainly rests on the fact that increased awareness of responsible tax behavior may shed useful light on the damaging effects aggressive tax planning may have on an MNE’s reputation. In addition, an increased focus on responsible tax behavior may assist the MNE’s management in maximizing shareholder welfare - and not only shareholder value. Against this background, the second part of the paper is devoted to an analysis of how MNEs actually can implement and design their own tax policy/strategy in responsible manner. Finally, in the third part of the paper, the author tries to take stock of the current endeavors of Danish-based MNEs with respect to implementation of responsible tax policies. In this context, and based on a review of publicly available information gathered from MNEs forming part of the OMX Copenhagen 25 Index, it is concluded that the largest Danish-based MNEs currently show solid appetite for implementing policies on responsible tax and that some of these policies actually make up good examples of how to design public tax policies/strategies.