Global corporate tax avoidance: the role of tax advisors

By Susan Deng

Susan attended the 2016 World Bank and IMF Annual Meetings in Washington D.C. She is a UNSW Co-op Scholar studying a Bachelor of Commerce.

Abstract

Tax advisors in the Big Four professional services firms represent a concentration of expertise and a channel through which governmental knowledge and private interests are exchanged. Solving global corporate tax avoidance requires engagement with tax advisors who facilitate aggressive tax planning and address conflicting incentives. This paper will explore potential conflicts and threats to independence enabled by tax advisor activities. It will also discuss the necessity for improved transparency and the consolidation of information disclosure.

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BEPS Project: Effectiveness for Developing Countries and How the World Bank and IMF Can Contribute

By Zoe Diamond

Zoe represented the UNSW Co-op Scholar Program at the 2015 World Bank and IMF Annual Meetings in Washington D.C. Zoe is studying a Bachelor of Commerce (Accounting and Finance). She has taken on industry internships with organisations such as Coca-Cola, Baycorp and the NSW Treasury in pursuit of her keen interest in corporate strategy and finance.

Abstract

Multinational enterprises (MNEs) engaging in corporate tax avoidance (CTA), or base erosion and profit shifting (BEPS) is a global issue. It affects the ability of both developing and developed countries alike to provide collective goods, infrastructure, education and healthcare. The impact of CTA is more severe for developing countries, however, as they are reliant on tax revenue from corporations to fund sustainable development outcomes such as the alleviation of poverty and providing access to basic sanitation. Current research recognises that developing countries face challenges in collecting tax. The lack of discourse addressing the disproportionate negative impact of CTA in developing countries is clearly evident.  This paper seeks to shed light on the impact CTA on developing countries and to propose recommendations to enable the World Bank and the International Monetary Fund (IMF) to supplement the multilateral effort to combat CTA. Firstly, the mechanisms of CTA will be briefly outlined. The key challenges faced by both developing countries and the multilateral organisations in combating CTA will then be examined. The effectiveness of the Organisation for Economic Cooperation and Development’s (OECD) BEPS Project for developing countries will then be examined. The role the World Bank and International Monetary Fund (IMF) are playing in this space will be analysed and recommendations will be provided as to how these organisations can contribute to more effective outcomes for developing countries.

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