Responsible Corporate Tax Practice: How, Why, and with What Implications?

This thesis studies an aspect of corporate social responsibility (CSR): multinational corporations’ (MNCs) recent claims of and commitment to responsible corporate tax practice. It investigates this phenomenon through a theoretical sample allowing us to explore the phenomenon in detail through three papers. Empirical material consists of interviews with tax and non-tax professionals, observations, and archival data (from 2000–2022). This thesis sets out to answer the overarching research question of: why and how do some MNCs consider tax a part of CSR and with what implications?
The first paper investigates how and why responsible corporate tax has emerged. It demonstrates how diverse actors came together through opportunities and catalysts’ creation of spaces for inter-action drawing in resources and ideas from CSR and of corporate tax. These dynamics between ideas and professionals are presented in a model of how issues are drawn closer together – that of corporate tax and that of CSR. The second paper explores how tax professionals integrate CSR into legal compliance practice. It uncovers the salient issues in the organizational process such as a dedicated tax director, a supportive management, and an instructive tax policy. This paper theorizes this process as the responsibilization of legal tax compliance. The third paper studies how we can observe an emergent private governance for responsible corporate tax and analyzes the legitimacy dynamics in relation to past corporate tax practices, and in relation to public governance. This analysis reveals the emergent private governance as possible to crowd in further public governance rather than compete with, or complement, public policy.
The thesis tells the story of the emergence and implications of responsible corporate tax practice that allows for an appreciation of the political role of corporations in relation to legal compliance and to governance. Together the three papers uncover the phenomenon of responsible corporate tax as having relational, organizational, and political implications. The thesis contributes to institutional theory with its multi-level analysis drawing on CSR perspectives, sociology of compliance and private governance literature. It extends our knowledge of inter-field relations and analyzes how the central concepts of institutions and institutionalization allow for a contemporary analysis of stability and change of organizational practice. The thesis argues that responsible corporate tax practice should be seen not only as a managerial practice, but also as a governance dynamic that should be understood in its contemporary context of complex societal and regulatory pressures of law and politics, and thereby provide insights to the continuous challenge of effective regulation of MNCs.